Customer Lifetime Value Calculator

How to use this calculator

1. Pick your currency at the top of the calculator panel. It sets the formatting only and does not convert the figures.
2. Under Calculate CLV from, choose Subscription / churn for recurring-revenue businesses, or Repeat purchases for e-commerce, retail and consumer services.
3. Enter your revenue per customer and your gross margin — the share of revenue left after the direct costs of delivery.
4. Add your monthly churn rate (subscription mode) or yourpurchases per year and average customer lifespan (repeat-purchase mode).
5. Optionally, enter your customer acquisition cost to also see CLV after CAC, the CLV:CAC ratio and the CAC payback period.

The results update as you type. The headline figure is gross-profit CLV — the estimated gross profit an average customer generates before acquisition cost. Switching mode keeps your currency and shows a fresh set of example figures for that mode.

CLV is an estimate. It depends on customer behaviour, churn, pricing, direct costs and the assumptions you enter.

What do I need to enter?

• Calculate CLV from — Subscription / churn, or Repeat purchases. Each mode shows its own fields.
• Average monthly revenue per customer — subscription mode. Recurring revenue from one active customer a month; it must be above zero.
• Monthly customer churn rate — subscription mode. The share of customers who cancel in a month, above 0% and up to 100%. It sets the expected lifespan.
• Average order value, Average purchases per year and Average customer lifespan — repeat-purchase mode. Each must be above zero; purchases are capped at 3,650 a year and lifespan at 100 years.
• Gross margin — the percentage of revenue left after direct delivery costs, 0% to 100%. It turns revenue into gross profit.
• Customer acquisition cost (optional) — what it costs to win one customer. Leave it blank to hide the CAC figures.

What do the results show?

• Customer lifetime value — the main figure: the estimated gross profit an average customer generates, before acquisition cost.
• Expected customer lifespan — in months for subscriptions, worked out as 1 ÷ churn; in years for repeat purchases, as you entered it.
• Gross profit per customer per month and Revenue CLV — subscription mode, without a CAC: monthly revenue after margin, and lifetime revenue before margin.
• Annual revenue per customer and Lifetime revenue — repeat-purchase mode, without a CAC.
• CLV after CAC and CLV:CAC ratio — shown once you enter a CAC: gross-profit CLV minus it, and gross-profit CLV divided by it.
• CAC payback — subscription mode with a CAC: months of gross profit needed to recover it.
• Summary — every input and result in one list, including revenue CLV.

How customer lifetime value is calculated

The main CLV figure is gross profit over the customer relationship, before customer acquisition cost. Revenue-only lifetime value is shown for reference but is not used as the headline, because it overstates what a customer is really worth. The two modes reach that figure differently.

In subscription / churn mode, the average lifespan comes from the churn rate:

With £100 average monthly revenue per customer, a 70.00% gross margin, a 5.00% monthly churn rate and £150 customer acquisition cost:

• Gross profit per customer per month is £100 × 0.70 = £70.00.
• Expected lifespan is 1 ÷ 0.05 = 20.00 months, or 1.67 years.
• Revenue CLV is £100 ÷ 0.05 = £2,000.00.
• Gross-profit CLV is £70.00 ÷ 0.05 = £1,400.00.
• CLV after CAC is £1,400.00 − £150 = £1,250.00.
• CLV:CAC ratio is £1,400.00 ÷ £150 = 9.33×.
• CAC payback is £150 ÷ £70.00 = 2.14 months.

In repeat purchases mode, lifetime revenue is built from order value, frequency and lifespan before the margin is applied:

With an £80 average order value, 4 purchases per year, a 3-year customer lifespan, a 45.00% gross margin and £60 customer acquisition cost:

• Annual revenue per customer is £80 × 4 = £320.00.
• Lifetime revenue is £320.00 × 3 = £960.00.
• Gross-profit CLV is £960.00 × 0.45 = £432.00.
• CLV after CAC is £432.00 − £60 = £372.00.
• CLV:CAC ratio is £432.00 ÷ £60 = 7.20×.

Revenue CLV shows expected customer spend. Gross-profit CLV is more useful for decision-making because it accounts for direct delivery costs.

Note: CLV is an estimate and does not automatically include fixed overheads, tax, financing costs, refunds, changing customer behaviour or the time value of money.

Which mode to use

Revenue CLV versus gross-profit CLV

Revenue CLV is the total amount a customer is expected to pay you over their lifetime. It is easy to quote but flattering: it treats a pound of revenue the same whether you keep 70p or 20p of it.

Gross-profit CLV multiplies that by your gross margin, so it reflects the money actually left after the direct costs of serving the customer — cost of goods, hosting, support, payment processing, fulfilment. It is the figure to compare against customer acquisition cost, and it is what this calculator uses as the headline.

Neither figure is net profit. CLV is before fixed overheads, financing and tax. For a full revenue-to-net-profit breakdown, see the Profit Margin Calculator.

What the CLV:CAC ratio means

The CLV:CAC ratio is gross-profit CLV divided by customer acquisition cost. A ratio of 9.33× means every £1 spent acquiring a customer is expected to return £9.33 in lifetime gross profit.

A common rule of thumb for subscription businesses is that around 3× or higher is healthy, roughly 1× is break-even on a lifetime basis, and below 1× means each new customer loses money. These are general guidelines, not benchmarks for your specific market — the right target depends on your margins, how fast you are growing and how long the CAC takes to pay back.

If CLV after CAC is negative, the calculator shows it as a loss: the customer is expected to cost more to acquire than they return in gross profit.

Important information

Important: this calculator is for general business planning and is not financial advice. It uses the figures you enter and standard CLV arithmetic; it does not model fixed overheads, tax, financing costs, refunds, discount rates or changing customer behaviour. For recurring-revenue metrics such as MRR, ARR and revenue retention, see the Monthly Recurring Revenue Calculator, or the Return on Investment Calculator for one-off projects and campaigns.

Frequently asked questions