A constant-churn gross-contribution approximation—not a cohort forecast or an ad-bid recommendation.
Calculation details
Planning estimate only. Platform fees, taxes, payment costs, and policies can change; verify current terms before pricing.
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What does this calculator estimate?
This customer lifetime value calculator estimates gross-contribution CLV using average order value, purchases per year, gross margin, and constant annual churn. It also shows implied customer lifetime and a planning CAC ceiling based on your target LTV:CAC ratio. It is a planning approximation, not a cohort forecast or bidding recommendation.
Why compare CLV to customer acquisition cost?
CLV in isolation says little; the ratio to acquisition cost is the decision number. A $400 CLV is excellent for a $50 acquisition and terrible for a $350 one. A common planning floor is 3:1, below which growth spends more than customers return. The calculator's margin input matters because revenue-based CLV flatters low-margin businesses.
Should churn be measured monthly or annually?
Match the period to the business rhythm: subscriptions churn monthly, insurance annually. What matters is consistency, because a monthly churn rate plugged into an annual-lifetime formula overstates lifespan by an order of magnitude. State the period next to the number wherever CLV is reported; a bare percentage invites exactly that mixing error.
How this calculator works
Formula
Annual gross contribution = average order value × purchases per year × gross margin. Approximate lifetime years = 1 ÷ annual churn. LTV = annual gross contribution × lifetime years. Planning CAC ceiling = LTV ÷ target LTV:CAC ratio.
Worked example
$50 orders, four purchases per year, 60% margin, and 20% annual churn produce $600 modeled gross-contribution LTV and a $200 planning CAC ceiling at a 3:1 target.
Assumptions to verify
- Annual churn remains constant and greater than zero.
- Order value, frequency, and gross margin remain constant.
- The CAC result is a planning ceiling before overhead, payback timing, discounting, refunds, and cohort variation—not an ad bid.
Frequently asked questions
How does this customer lifetime value calculator calculate CLV?
CLV equals average order value × purchases per year × gross margin × (1 ÷ annual churn). It estimates gross-contribution lifetime value under a constant annual churn assumption.
What is the customer lifetime value formula?
Annual gross contribution = average order value × purchases per year × gross margin. Customer lifetime years = 1 ÷ annual churn. CLV = annual gross contribution × lifetime years.
How is the target CAC calculated?
The planning CAC ceiling equals CLV ÷ target LTV:CAC ratio. It is not an ad-bid recommendation because overhead, cash timing, uncertainty, and channel economics still matter.
Cite this tool
BoringToolsKit. “Customer Lifetime Value Calculator.” boringtoolskit.com/customer-lifetime-value-calculator/ (reviewed July 2026). Free to reference in articles, syllabi, and answer posts with a link.
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