Customer Lifetime Value Calculator
Estimate what a customer is worth across the whole relationship: average revenue, gross margin and churn in one number.
Estimated lifetime value
What it measures
Customer lifetime value is the gross profit a customer generates before they leave. The quick model divides monthly margin per account by monthly churn, because 1 divided by churn is the expected customer lifetime in months. Percentages go in as whole numbers, so 2.5 means 2.5 percent.
Why it matters
LTV sets the ceiling on what you can afford to acquire a customer. It is the other half of the LTV to CAC ratio that most SaaS investors read first.
A worked example
An account paying 200 a month at 80 percent margin with 2.5 percent monthly churn is worth 160 a month for an expected 40 months, so 6,400 in lifetime margin.
How to read and improve it
Churn is the biggest lever. Halving churn doubles LTV, which usually beats any realistic price rise.
Frequently asked questions
Should I use revenue or margin?
Margin. Acquisition decisions compare LTV against costs, so an LTV built on revenue overstates what you can spend.
What if my churn is yearly?
Divide the annual rate by 12 for a rough monthly figure, or use a monthly cohort number if you have one.
More in SaaS metrics: SaaS CAC Calculator · Churn Rate Calculator · MRR Calculator
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