Calculate CLV using average purchase value, frequency and customer lifespan.
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Average revenue per transaction.
Average number of purchases per customer per year.
Average years a customer stays active.
CLV = Avg Purchase Value × Purchase Frequency × Customer Lifespan
CLV estimates total revenue from a customer over their relationship. Use it to guide acquisition spending.
Enter values to calculate.
They are often used interchangeably. Some distinguish CLV as revenue-based and LTV as profit-based (after costs).
It tells you the maximum you should spend to acquire a customer. If CAC exceeds CLV, you lose money.
Increase purchase frequency, raise average order value, improve retention, and reduce churn.
3:1 or higher is healthy. Below 1:1 means acquisition costs exceed customer value.