Free marketing calculator · Customer value
Customer Lifetime Value (CLV) Calculator
Estimate the revenue a customer generates across their relationship with your business and, when you add contribution margin, the contribution value behind that revenue.
CLV turns repeat purchasing and retention into a financial estimate. It can help frame acquisition budgets, retention decisions and customer strategy — provided the assumptions behind it are made clear.
What is Customer Lifetime Value?
Customer Lifetime Value (CLV), sometimes called customer lifetime value or LTV, estimates the value generated by an average customer over the duration of the customer relationship.
A simple revenue-based model combines average order value, purchase frequency and customer lifespan.
Example: £50 average order value × 4 purchases per year × 5 years = £1,000 revenue CLV.
Revenue CLV and contribution CLV are different
£1,000 of lifetime revenue is not the same as £1,000 of economic value. Products and services have variable costs, so a contribution-based view can be more useful when CLV is being compared with acquisition spend.
If revenue CLV is £1,000 and contribution margin is 40%, estimated contribution CLV is £400.
The calculator keeps the two measures separate rather than silently switching between them. If you use CLV in a report or target, state whether you mean revenue or contribution value.
Where do the inputs come from?
Average order value and purchase frequency can usually be calculated from transaction data. Customer lifespan is often the more difficult assumption, particularly for younger businesses or categories with long repurchase cycles. Cohort analysis can provide a stronger basis than simply choosing an expected number of years.
For subscription businesses, churn and retention models may provide a more appropriate route to lifetime estimation. The simple model here is intentionally transparent: you can see exactly which assumptions drive the answer.
How CLV helps marketing decisions
CLV becomes particularly useful when paired with CAC. If you understand the value created by a customer and the cost required to acquire one, you can examine CLV:CAC, payback and how much acquisition spend the economics can support.
CLV can also reveal why acquisition channels should not always be judged solely on first-order revenue. Two channels with similar initial conversion economics may acquire customers with different repeat-purchase behaviour.
Connect CLV with acquisition cost
The Customer Economics Calculator combines CLV with CAC, CLV:CAC, CAC payback and maximum sustainable CAC, including a contribution-based value view when margin is supplied.
CLV calculator FAQs
Is CLV revenue or profit?
It can be modelled in different ways, which is why the definition matters. This calculator explicitly distinguishes revenue CLV from contribution CLV. Neither should be described as accounting profit without accounting for the relevant additional costs.
What if I do not know customer lifespan?
Use the best evidence available from historical cohorts, retention data or a clearly labelled scenario assumption. If lifespan is highly uncertain, model several scenarios rather than presenting one estimate as precise.
Is a higher CLV always better?
Higher customer value is generally useful, but the commercial question is how that value is created and what it costs to acquire and serve the customer. CLV should be interpreted alongside CAC, margin, payback and cash-flow considerations.
What is the difference between CLV and LTV?
The terms are often used interchangeably in marketing and customer analytics. Different organisations may calculate them differently, so the formula and value basis are more important than the label.