Free customer lifetime value calculator 2026. Calculate CLV = (ARPU × gross margin) / churn rate. See simple CLV, predictive CLV, and historic CLV. Target LTV:CAC > 3:1 for SaaS. Track by segment and cohort.
Enter your Monthly ARPU (Average Revenue Per User / Account).
Enter your Gross Margin percentage (Revenue minus direct COGS/hosting/support divided by Revenue; SaaS is typically 75–85%).
Enter your Monthly Customer Churn Rate percentage (percentage of customers or MRR lost each month).
Review your Gross-Margin Customer Lifetime Value (CLV), Average Customer Lifespan in months, and LTV:CAC ratio.
Customer Lifetime Value (CLV or LTV) calculates the total gross profit a business expects to earn from an average customer before they churn. Using Gross-Margin CLV (rather than top-line revenue) ensures you account for hosting, fulfillment, and customer support costs when setting your maximum allowable Customer Acquisition Cost (CAC).
$100/mo ARPU, 80% gross margin ($80/mo gross profit), 3% monthly churn. Avg Lifespan = 1 ÷ 0.03 = 33.3 months. Gross-Margin CLV = $80 ÷ 0.03 = $2,667.
$4,000/mo ARPU, 85% gross margin ($3,400/mo gross profit), 0.8% monthly churn. Avg Lifespan = 125 months (often capped at 60 months = $204,000 conservative CLV, or $425,000 uncapped).
$15/mo ARPU, 70% gross margin (after App Store 15–30% fee), 7% monthly churn. Avg Lifespan = 14.3 months. CLV = $10.50 ÷ 0.07 = $150.
| Monthly Churn Rate | Annualized Churn | Avg Customer Lifespan | Gross-Margin CLV | Max Allowable CAC (at 3:1 LTV:CAC) |
|---|---|---|---|---|
| 1.0% / month | 11.4% / year | 100.0 months (8.3 yrs) | $8,000 | $2,667 |
| 2.0% / month | 21.5% / year | 50.0 months (4.2 yrs) | $4,000 | $1,333 |
| 3.0% / month | 30.6% / year | 33.3 months (2.8 yrs) | $2,667 | $889 |
| 5.0% / month | 46.0% / year | 20.0 months (1.7 yrs) | $1,600 | $533 |
| 8.0% / month | 63.2% / year | 12.5 months (1.0 yr) | $1,000 | $333 |
| LTV:CAC Ratio | Unit Economics Status | Strategic Recommendation |
|---|---|---|
| Below 1.0 : 1 | Destroying Capital | Freeze paid acquisition immediately; fix onboarding churn or raise pricing |
| 1.0 : 1 to 2.5 : 1 | Low Margin / Inefficient | Optimize funnel conversion rates, cut underperforming ad channels, upsell |
| 3.0 : 1 to 4.5 : 1 | Gold Standard / Optimal | Healthy unit economics; sustainable growth and predictable payback |
| Above 5.0 : 1 | Under-Investing in Growth | You are leaving market share on the table; deploy more capital into sales & marketing |
A common mistake in early-stage pitch decks is calculating LTV as `ARPU ÷ Churn Rate` without multiplying by **Gross Margin %**. Every dollar of revenue requires Cost of Goods Sold (COGS) — whether that is physical inventory and shipping in e-commerce (where gross margins are 40–60%) or AWS infrastructure, third-party LLM API tokens, payment processing fees, and Customer Success salaries in SaaS (where gross margins are 70–85%).
If an e-commerce customer spends $500 over their lifetime at a 40% gross margin, they only generate $200 in gross profit to cover marketing and operating overhead. Spending $160 on CAC looks like a 3.1x ratio against revenue, but is actually a weak 1.25x ratio against gross profit.
Find answers to the most common questions about customer lifetime value (clv) calculator.
Multiply your Monthly Average Revenue Per User (ARPU) by your Gross Margin percentage to find your monthly gross profit per customer, then divide that figure by your monthly churn rate (expressed as a decimal). For example: ($100 ARPU × 0.80 Gross Margin) ÷ 0.04 Monthly Churn = $2,000 CLV.
Yes, CLV (Customer Lifetime Value) and LTV (Lifetime Value) refer to the exact same metric. In SaaS and venture capital, LTV is commonly used inside the "LTV:CAC ratio," whereas e-commerce and retail marketers frequently use CLV.
A 3:1 LTV:CAC ratio is the universal benchmark for healthy unit economics—meaning a customer generates $3.00 in lifetime gross profit for every $1.00 spent acquiring them. A ratio below 2:1 leaves too little margin to cover R&D and G&A overhead, while a ratio above 5:1 suggests you could grow faster by investing more aggressively in marketing.
Reducing monthly churn has a nonlinear, compounding impact on CLV. Cutting monthly churn from 4% to 2% immediately doubles your Customer Lifetime Value (100% increase), whereas raising prices by 10% increases CLV by only 10% (and may slightly increase churn).
Calculations and computational models on QuickBizCalc are verified against published regulatory standards and statutory tax tables:
Publication 15-T (Federal Income Tax Withholding Methods) & Publication 15 (Employer's Tax Guide).
Fair Labor Standards Act (FLSA 29 U.S.C. § 207) regulations on overtime hours, recordkeeping, and minimum wage.
OASDI taxable maximum wage base limits and statutory FICA tax rates (6.2% Social Security + 1.45% Medicare).
Formulas and worked examples are checked against the sources above before publishing. For advice on your own situation, consult a licensed tax professional or accountant.
Customer Lifetime Value (CLV)
$2,666.67
Monthly ARPU
$100.00
Gross Margin
80%
CLV
$2,666.67
Avg Lifetime
33.3 mo
