Finance & Economics / Business & Investment
Customer Lifetime Value Calculator (Simple)
Typical transaction amount
How many times per year
How long they remain a customer
Leave blank for gross CLV
About Customer Lifetime Value (CLV)
Formula: CLV = Average Purchase Value × Purchase Frequency per Year × Customer Lifespan (years)
For profit-based CLV: Multiply by profit margin percentage
Why CLV matters: Knowing CLV helps you determine how much to spend on customer acquisition. A common rule of thumb is that Customer Acquisition Cost (CAC) should be 3-5 times lower than CLV.
Example: If CLV is $1,000, you can afford to spend $200-$333 to acquire a customer and still be profitable.
Improving CLV: Increase purchase value, increase purchase frequency, or increase customer lifespan through better retention.