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Universal · Buy-Side calculator

LTV (Customer Lifetime Value)

LTV is the total revenue you can expect from a customer over the whole relationship.

Formula

LTV = Average order value × Purchases per year × Customer lifespan

Fill in any 3 fields. The one you edited longest ago is solved for you.

input
Dollars.
input
input
waiting
Dollars. Waiting for the other fields.

Waiting for 3 values to solve LTV.

What is LTV?

LTV is the total revenue you can expect from a customer over the whole relationship. It sets the ceiling on what you can afford to pay to acquire one, which makes it the anchor for every CAC and CPA target.

Worked example

If average order value is $65, purchases per year is 4 and customer lifespan is 3 yrs, then LTV = $780.00.

LTV = Average order value × Purchases per year × Customer lifespan

Formula variable breakdown

aovAverage order value
Enter average order value directly, or leave it blank and let the solver calculate it from the other 3 fields.
frequencyPurchases per year
Enter purchases per year directly, or leave it blank and let the solver calculate it from the other 3 fields.
lifespanCustomer lifespan
Enter customer lifespan directly, or leave it blank and let the solver calculate it from the other 3 fields.
ltvLTV(output)
Enter LTV directly, or leave it blank and let the solver calculate it from the other 3 fields.

Tactical application guide

LTV is the product of average order value, purchases per year and customer lifespan, so a gap in one must be made up by the others. Fill any three to solve the fourth: set a LTV goal and two levers you trust, and see exactly how far the remaining lever has to move.

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