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LTV Calculator
Calculate Customer Lifetime Value (LTV/CLV) using churn rate or lifespan, factoring in gross margin. Compare your LTV against CAC to measure business health and identify how much you can afford to spend acquiring each customer.
Average Revenue Per User each month
Revenue minus cost of service
Monthly customer churn rate
Customer Acquisition Cost - unlocks LTV:CAC & payback
Enter ARPU to calculate Customer Lifetime Value.
Industry LTV Benchmarks
| Industry | Typical LTV Range |
|---|---|
| SaaS (SMB) | $500 – $5,000 |
| E-commerce | $100 – $500 |
| Mobile App | $10 – $100 |
| B2B Enterprise | $10,000 – $100,000+ |
| Subscription Box | $200 – $600 |
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Frequently Asked Questions
What is Customer Lifetime Value (LTV)?
LTV (or CLV - Customer Lifetime Value) is the total revenue a business can expect from a single customer over the entire duration of their relationship. LTV = ARPU × Gross Margin × Average Customer Lifespan. It is a crucial metric for understanding how much you can sustainably spend to acquire customers.
How does churn rate affect LTV?
Churn rate is inversely related to LTV. A 5% monthly churn means the average customer stays for 20 months (1/0.05). A 2% churn means 50 months. Halving your churn rate roughly doubles your LTV, which either doubles your profit per customer or lets you double your acquisition spend - a powerful lever for growth.
Should I use gross margin in my LTV calculation?
Yes. LTV should reflect margin, not just revenue. Including gross margin gives you the actual profit contribution per customer, which is what you can actually afford to spend on acquisition. A customer paying £100/month but costing £60 to serve has a true ARPU of £40 for LTV purposes.
What is the difference between LTV and predicted LTV?
Historical LTV is calculated from actual customer data - how long they stayed and what they paid. Predicted LTV uses churn rate and ARPU to project future value for new customers. This calculator computes predicted LTV, which is more useful for forward-looking decisions about acquisition spend and pricing.
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