Customer Lifetime Value (CLV/LTV) Calculator
Understanding how much a customer is worth to your business over time is essential for making smart marketing decisions. Use our Customer Lifetime Value (CLV) Calculator to estimate the total revenue a single customer is expected to generate throughout their relationship with your business.
Try our free CLV/LTV Calculator
Customer Lifetime Value (also known as LTV) helps you determine how much you can afford to spend on acquiring new customers while remaining profitable. By calculating the long-term value of each customer, you can make better decisions about advertising budgets, retention strategies and growth planning.
How to Calculate Customer Lifetime Value
The basic formula for CLV is:
Customer Lifetime Value = Average Order Value × Purchase Frequency × Customer Lifespan
- Average Order Value (AOV): The average amount a customer spends per transaction.
- Purchase Frequency: How many times a customer buys from you per year.
- Customer Lifespan: The average number of years a customer continues buying from you.
Customer Lifetime Value (CLV) Calculator
Frequently Asked Questions
Customer Lifetime Value (CLV), sometimes referred to as LTV, is the total revenue a business can expect to earn from a single customer over the entire duration of their relationship. It helps businesses understand long-term customer profitability rather than focusing only on individual transactions.
The basic CLV formula is:
Average Order Value × Purchase Frequency × Customer Lifespan
For example, if a customer spends £50 per order, purchases 4 times per year, and remains a customer for 3 years, their CLV would be:
£50 × 4 × 3 = £600
CLV helps determine how much you can afford to spend on acquiring new customers while staying profitable. It also highlights the importance of customer retention, upselling and building long-term relationships.