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LTV calculator: what a customer is worth over time.
Customer lifetime value turns "how much did this sale make" into "how much is this customer worth", which changes how much you can afford to pay for one. Enter the average order, how often people buy, how long they stay and your margin, and the calculator gives the LTV in revenue and in profit, plus the acquisition cost you can afford.
Your numbers
After product, delivery and fees.
Your results
Each customer is worth about $192 of profit over their lifetime, so you can pay up to $64 to win one and still keep a healthy 3:1 ratio.
- Lifetime value (profit)
- $192
- Max acquisition cost at 3:1
- $64
A common rule: LTV profit should be at least three times the cost to acquire. - Orders per customer
- 6.0
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Customers are worth more when someone follows up.
Automatic reorder reminders, WhatsApp support that answers around the clock and email sequences raise purchase frequency and lifespan without more ad spend. We build them on the tools you already use.
What lifetime value measures
LTV (or CLV, customer lifetime value) is the revenue or profit a customer brings over the whole relationship, not just the first order. It is the number that decides your marketing budget: a business that only looks at the first sale will underspend on acquisition and lose to competitors who know a customer is worth five orders, not one.
What a good LTV looks like
LTV is only meaningful next to the cost of acquiring a customer (CAC). A widely used rule is an LTV-to-CAC ratio of 3:1 or better in profit terms: below that, growth eats the margin; far above it, you are probably underinvesting in growth. Subscription businesses and repeat-purchase stores live on this ratio; a business with one-off customers should treat LTV as the profit on that single sale.
How to raise it
- Increase purchase frequency with automatic follow-up: reorder reminders, WhatsApp and email sequences, and support that answers instantly.
- Raise the average order with bundles, order bumps and upsells; our digital product funnel took the average order from $35 to over $100.
- Extend the lifespan by answering customers fast; HeroStoryBook runs a WhatsApp support agent that handles text, voice and images around the clock.
- Use the result to set your targets in the cost per lead and break-even ROAS calculators.
Questions, answered.
How do I calculate customer lifetime value?
Multiply the average order value by the purchases per year and by the number of years a customer stays. Multiply by your margin for the profit version. $80 × 3 × 2 = $480 of revenue, or $192 of profit at 40% margin.
What is a good LTV to CAC ratio?
A common benchmark is 3:1 in profit terms: the lifetime profit of a customer should be at least three times what it cost to acquire them.
LTV or CLV: is there a difference?
No, they are two names for the same idea: lifetime value (LTV) and customer lifetime value (CLV).
Should I use revenue or profit?
Use profit for decisions about spending, because that is what pays for acquisition. Revenue LTV is useful for comparing segments.
How do I know how long customers stay?
Look at your own data: the share of customers who buy again after a year, or the average time between the first and the last order. If you have no data, use a conservative one to two years.
How much can I spend to acquire a customer?
At a 3:1 ratio, a third of the lifetime profit. If a customer brings $192 of profit, you can spend up to $64 to win one.
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