Free tool · LTV

Customer lifetime value calculator.

What a customer is worth over their lifetime, how that compares with what they cost to win, and how long until they pay back.

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  1. 1Type your own numbers on the left. Everything updates as you type.
  2. 2Read the results on the right. The highlighted figure is the one that matters most.
  3. 3Copy the link to share these exact numbers, or switch currency at the top.
Lifetime value (profit)–

Lifetime revenue: –

LTV : CAC–
Payback period–
Max CAC at 3:1–
Profit on first order–

Exchange rates: fallback table dated 2026-10-01. Live rates load from Frankfurter when available.

The lifetime value formula

LTV = average order value × orders per year × years retained × gross margin
LTV : CAC = LTV ÷ cost to acquire a customer
Payback (months) = CAC ÷ (monthly profit per customer)

Worked example

A takeaway's average order is £45, a regular customer orders four times a year and sticks around for two and a half years. At a 40% margin, each customer is worth £180 in profit over their lifetime. If Meta ads bring in new customers at £35 each, LTV to CAC is 5.1:1 and the customer pays back in about six months. The first order only makes £18 profit, so judged on first-order ROAS the campaign looks weak. Judged on lifetime value it is one of the best things the business can spend money on.

Using it to set ad targets

Divide LTV by three for a conservative maximum CAC and give that to whoever runs your ads as the cost per new customer target. Then make sure the platforms can tell new customers from returning ones, which is a tracking job, not a bidding one.

FAQ

Customer lifetime value calculator: questions answered.

What is customer lifetime value?

The profit a customer brings over the whole time they buy from you, not just their first order. It is the number that tells you how much you can spend to win them.

What is the customer lifetime value formula?

LTV = average order value × orders per year × years retained × gross margin. A simpler revenue version leaves out the margin, but profit is what you can actually spend on ads.

What is a good LTV to CAC ratio?

3:1 is the usual benchmark: each customer returns three times what they cost to acquire. Under 1:1 means you lose money on every customer. Much above 5:1 often means you could grow faster by spending more.

What is CAC?

Customer acquisition cost: everything you spend to win a customer, including ad spend and agency fees, divided by the number of new customers.

What is payback period?

How many months it takes for a customer's profit to repay what you paid to acquire them. Shorter is better for cash flow. Under 12 months is comfortable for most small businesses.

How do I know years retained?

Look at how long past customers kept buying. If you only have churn, years retained = 1 ÷ annual churn rate. A 40% annual churn means customers stay about 2.5 years on average.

Why does this matter for paid ads?

First-order ROAS makes repeat-purchase businesses look unprofitable. If a customer buys four times, you can afford a first-order loss. LTV sets the real CPA target for your campaigns.

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