Customer Lifetime Value Calculator
Customer Lifetime Value estimates the total profit a business can expect from a customer over the full relationship, setting the ceiling on what it can afford to spend acquiring them.
Order Economics
Retention
Customer Lifetime Value
What This Means
Each order leaves $34.00 in gross profit. Across 4 lifetime orders, that's the total profit one customer generates, the ceiling on what you can profitably spend to acquire them.
Want the full picture, not just this one number?
The Formula
LTV = (AOV − COGS − Shipping − Payment Fees) × Average Orders per Customer (Lifetime)
Same underlying formula as Average Revenue Per Account × Gross Margin × Lifespan, just built from per-order costs and a lifetime order count instead of a pre-known margin percentage.
Why It Matters
LTV is what makes every other growth decision make sense or fall apart, since it defines the ceiling on acquisition spend while still turning a profit. Building it from per-order costs also shows exactly which lever raises it, more orders per customer, a higher order value, or lower fulfillment costs, rather than hiding all three behind one margin number.
Example
A customer buys at a $60 AOV, with $18 in COGS, $6 in shipping, and $2 in payment processing per order, leaving $34 in gross profit per order. Across 4 lifetime orders, LTV is $34 times 4, which equals $136.
Frequently Asked Questions
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