ProfitHelm

Customer LTV Calculator

Calculate customer lifetime value and find out how much you can spend to acquire customers profitably.

Customer Data

Enter your average customer metrics

$

Average amount per order

How many times a customer buys per year

How many years a customer stays active

%

Net profit margin on orders

$

Cost to acquire one customer

Lifetime Value Analysis

Your customer economics

Customer Lifetime Value (LTV)

$0.00

Lifetime profit: $0.00

LTV:CAC Benchmark

0:11:13:15:1+

Recommended Max CAC

Conservative (3:1)$0.00
Break-even (1:1)$0.00

Annual Revenue/Customer

$0.00

Annual Profit/Customer

$0.00

LTV:CAC Ratio Benchmarks

RatioStatusWhat It Means
< 1:1Losing MoneySpending more to acquire than you earn. Unsustainable.
1:1 - 3:1MarginalBreaking even or small profit. Room to optimize.
3:1 - 5:1HealthySweet spot. Profitable acquisition with growth potential.
> 5:1ExcellentVery efficient. Consider investing more in growth.

How to Improve Customer LTV

Increase AOV

  • - Upsell & cross-sell
  • - Product bundles
  • - Free shipping thresholds
  • - Premium product tiers

Increase Frequency

  • - Email marketing
  • - Subscription models
  • - Loyalty programs
  • - Replenishment reminders

Extend Lifespan

  • - Excellent customer service
  • - Win-back campaigns
  • - Community building
  • - Regular product updates

Lower CAC

  • - Referral programs
  • - Organic content/SEO
  • - Better ad targeting
  • - Improve conversion rate

Related Calculators

Profit Margin

Calculate margins to input for LTV

Break-Even ACOS

Calculate profitable ad spend

Chargeback Cost

Factor chargebacks into LTV

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Frequently Asked Questions

What is customer lifetime value (LTV)?

Customer Lifetime Value (LTV) is the total revenue you can expect from a single customer over their entire relationship with your business. It's calculated as: Average Order Value x Purchase Frequency x Customer Lifespan.

What is a good LTV:CAC ratio?

A healthy LTV:CAC ratio is 3:1 or higher. This means you earn $3 for every $1 spent acquiring a customer. Below 1:1 means you're losing money. 1:1 to 3:1 is break-even to marginally profitable. Above 5:1 may mean you're under-investing in growth.

How do I improve customer LTV?

Improve LTV by: 1) Increasing average order value (upsells, bundles) 2) Increasing purchase frequency (email marketing, subscriptions) 3) Extending customer lifespan (loyalty programs, great service) 4) Reducing churn with retention campaigns.

Why is LTV important for e-commerce?

LTV determines how much you can spend to acquire customers profitably. If LTV is $200, you can afford higher ad costs than if LTV is $50. Knowing your LTV helps optimize marketing spend and forecast revenue.

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