Customer Lifetime Value (CLV) Calculator
Estimate customer lifetime value, the CLV to CAC ratio and payback period from average order value, purchase frequency, lifespan and gross margin.
If provided, shows the lifespan implied by churn (1 ÷ churn rate) for comparison.
Your results
Calculation breakdown
- CLV
- $100.00 × 4 × 3 × 60% = $720.00
- CLV : CAC ratio
- $720.00 ÷ $180.00 = 4x
- Payback period
- $180.00 ÷ (annual profit per customer) = 0.75 years
Assumptions
- A CLV:CAC ratio of 3x or higher is generally considered healthy for subscription and repeat-purchase businesses.
- Gross margin is applied to revenue to estimate profit contribution per customer.
- Churn-implied lifespan (1 ÷ monthly churn, in years) is shown only as a cross-check, not used in the main CLV formula unless you set lifespan to match.
Results are estimates only and are not financial, tax, legal or credit advice.
How this calculator works
Enter average order value, purchases per year, expected customer lifespan and gross margin to estimate customer lifetime value (CLV), then compare it against your customer acquisition cost (CAC) to see your CLV:CAC ratio and payback period in years.
Frequently asked questions
What is a healthy CLV:CAC ratio?
A ratio of 3x or higher is commonly considered healthy, meaning a customer generates at least three times what it costs to acquire them.
How is payback period calculated?
It divides your customer acquisition cost by the annual profit contribution per customer, showing how long it takes to recoup acquisition spend.
What if I only know my churn rate?
Enter your monthly churn rate to see the implied customer lifespan (1 ÷ churn rate, in years) as a cross-check against your lifespan estimate.
Results are estimates only and are not financial, tax, legal or credit advice.