Customer Ltv Calculator

Traditional: best for e-commerce, retail, transactional businesses where customers buy episodically. Need: purchase value, frequency per year, customer lifespan estimate. Lifespan often guessed from historical data (“most customers buy for 3 years before going dormant”). SaaS / churn-based: best for subscriptions, recurring revenue. Need: monthly ARPU, monthly churn rate. No lifespan estimate needed – implied as 1/churn months. Example: 5% monthly churn → average customer lifespan = 20 months.

Future cash isn’t worth as much as cash today (inflation, opportunity cost, risk). Net Present Value discounts future cash flows: $100 received in year 5 with 10% discount = $100 / 1.10⁵ = $62 in today’s dollars. Typical rates: 8% (large stable business), 10-15% (typical SaaS), 20%+ (early-stage startup, high risk). 0% disables discounting. The tool sums each period’s discounted net profit and reports it as “NPV LTV”. Use NPV LTV (not Net LTV) when comparing against CAC for ratio purposes – it’s the more conservative, more accurate number.

<1: unprofitable (you lose money on each customer). 1-3: needs improvement (positive but thin margins, may not survive scaling). 3-5: good (industry-standard healthy zone). 5+: excellent BUT also check whether you’re under-spending on growth – you might be leaving market share on the table. Above 20 likely means CAC reporting is incomplete (missing brand, content, or product team costs) or you’re severely under-investing in acquisition.

Months until the cumulative gross profit from a customer equals their acquisition cost. Calculation: CAC ÷ monthly_gross_profit. SaaS target: under 12 months (so you recover CAC within the first year of a 2-5+ year customer relationship). B2B with slower deal cycles: under 18-24 months. Critical because payback period drives cash flow even when LTV looks healthy on paper – long payback means you tie up working capital.

Gross margin = (Revenue − COGS) ÷ Revenue × 100. COGS = direct costs to deliver the product/service (server costs, payment processing, fulfilment, support). It does NOT include marketing, R&D, or overhead. Why this matters: LTV is meant to compare against CAC (a marketing cost). Using net-of-everything margin would double-count by subtracting marketing twice. SaaS gross margins typically 70-90%, e-commerce 30-50%, marketplaces 10-30%.

The churn-based formula uses a single blended monthly churn rate, which is the SaaS standard but simplifies reality. Real churn often varies: high in month 1-2 (onboarding fall-off), low in months 6+ (sticky customers). For more accuracy, calculate LTV per cohort and weight-average – or use blended churn from customers who’ve been active 90+ days (excludes the early-stage volatility). For early-stage products, the blended LTV is often overstated; track it carefully.

It’s implicit in the churn rate. Customer lifespan ≈ 1 / monthly churn rate (in months). Example: 5% monthly churn → 1/0.05 = 20 months average. This is the mathematical relationship that the SaaS LTV formula relies on (it’s a geometric series convergence). If you want a 5-year LTV under a 2% churn assumption, the formula already gives you that – you don’t need to specify the horizon.

LTV:CAC = ∞ (infinity). The verdict shows “no cac entered”. You should always have some acquisition cost – even organic/referral customers have a cost (content production, referral program payouts, brand-building). If you genuinely have $0 CAC for some segment, evaluate ROI as “infinite” but still report Net LTV as a number to compare against other channels.

Yes. All calculations run in your browser via vanilla JavaScript. Revenue figures, CAC, churn rates, and any business metrics you enter never leave your device. The CSV download is generated and offered locally. Close the tab and the data is gone – nothing is logged.