© 2026 The Stack Matrix

ContactPrivacy PolicyData Deletion
The Stack MatrixBusiness planning platform
CalculatorsFinance ToolsFinance KitPricing KitSales KitMarketing KitBusiness OSWorkspace
Calculators/Business Metrics/Customer Lifetime Value

Business Metrics

Customer Lifetime Value Calculator

Estimate the lifetime gross profit generated by an average customer using purchase value, purchase frequency, customer lifespan, and gross margin.

Customer Lifetime Value Calculator

Estimate how much gross profit an average customer generates over the expected customer relationship.

Estimated Customer Value

$720

Estimated lifetime gross profit per customer

Annual Revenue / Customer$400
Lifetime Revenue / Customer$1,200
Gross Margin60.0%

Formula

LTV = Average Purchase Value × Purchases Per Year × Customer Lifespan × Gross Margin

Continue the workflow

Carry your average order value and gross margin into the Marketing & Customer Growth Kit’s campaign planner to model acquisition spend against customer value together.

Continue to Marketing Kit →

Next step

Connect sales metrics to a revenue plan

Bring revenue growth, order value, conversion, acquisition cost, and customer value into a shared planning workflow.

01

Calculate

Start with a focused business question and get a clear estimate.

02

Compare

Move from one answer to multiple assumptions and scenarios.

03

Plan

Save useful scenarios in your workspace and build on them later.

Plan Sales & Revenue →Save & Continue in Workspace

What is Customer Lifetime Value?

Customer Lifetime Value, commonly called LTV or CLV, is an estimate of the economic value a customer generates over the expected length of the customer relationship.

How to Calculate LTV

A simple gross-profit-based LTV calculation multiplies the average purchase value by purchase frequency and expected customer lifespan, then applies the gross margin.

LTV = Average Purchase Value × Purchases Per Year × Customer Lifespan × Gross Margin

LTV and Customer Acquisition Cost

LTV is often analyzed alongside Customer Acquisition Cost. CAC measures acquisition spending per new customer, while LTV estimates the value generated over the customer relationship.

Calculate Customer Acquisition Cost →Explore Business Metrics →

Related Business Metrics

Customer Acquisition Cost

Calculate the average cost of acquiring a customer.

ROI Calculator

Calculate return on investment and net return.

Profit Margin

Calculate gross and operating profit margins.

Example

Suppose a customer spends $100 per purchase, purchases four times per year, remains a customer for three years, and the business has a 60% gross margin. Annual revenue per customer would be $400 and lifetime revenue would be $1,200. Applying the 60% gross margin produces an estimated lifetime gross profit of $720.

Frequently Asked Questions

What does LTV stand for?

LTV stands for Customer Lifetime Value. It estimates the economic value generated by a customer over the expected customer relationship.

What is the difference between LTV and CLV?

LTV and CLV are commonly used interchangeably for Customer Lifetime Value.

Should LTV use revenue or profit?

Revenue-based LTV measures customer revenue, while profit-based LTV accounts for gross margin. This calculator uses gross margin so the result represents estimated lifetime gross profit.

This calculator provides estimates for planning and educational purposes. Actual customer economics can vary based on retention, purchase behavior, margins, discounts, refunds, support costs, and other business factors.