AdProfitTools

Find calculators and guides.

Customer Lifetime Value Calculator

Calculate ecommerce or SaaS customer lifetime value, LTV:CAC ratio, CAC payback period, and a target CAC limit.

LTV model

Estimate LTV from order value, purchase frequency, and lifespan

Example: $80
$
Example: 3
Example: 2 years
years
Example: 60%
%
Example: $90
$
Example: 3x
x

Use your own planning target. The default is an editable example, not a universal benchmark.

Review the result

Revenue LTV
--
Margin-adjusted LTV
--
LTV:CAC
--
CAC payback
--
Value after CAC
--
Max CAC at target
--

How to use this calculator

Use the model that matches your revenue

The ecommerce mode uses order value, purchase frequency, and lifespan. The SaaS mode uses monthly ARPU and churn. Known LTV mode lets you audit an existing estimate against CAC.

Compare CAC with gross profit

Revenue LTV shows customer spending. Margin-adjusted LTV applies gross margin before comparing value with acquisition cost and calculating the CAC limit at your target ratio.

Formula quick reference

  • Ecommerce revenue LTV = average order value x annual purchase frequency x customer lifespan
  • SaaS revenue LTV = monthly ARPU / monthly churn rate
  • Margin-adjusted LTV = revenue LTV x gross margin
  • LTV:CAC ratio = margin-adjusted LTV / CAC
  • CAC payback months = CAC / monthly gross profit per customer
  • Maximum CAC at target = margin-adjusted LTV / target LTV:CAC ratio

Worked example

Ecommerce customer example

Inputs: $80 average order, 3 purchases a year, 2-year lifespan, 60% margin, and $90 CAC

Result: $288 margin-adjusted LTV, 3.2x LTV:CAC, and 7.5-month payback

Note: At a user-entered 3x target, the maximum CAC is $96.

Common mistakes

  • Comparing revenue LTV with fully loaded CAC without applying gross margin.
  • Using churn, retention, and CAC from different cohorts or reporting periods.

What the result means

  • Treat the target LTV:CAC ratio as a planning input, not a universal pass/fail rule.
  • Validate modeled LTV against realized cohort revenue and contribution margin.

Source notes

  • Shopify documents the customer value, purchase frequency, and lifespan approach to CLV.
  • Stripe documents CAC payback as acquisition cost divided by monthly gross profit per customer.

Customer Lifetime Value Calculator FAQ

How is customer lifetime value calculated?

For ecommerce, multiply average order value by annual purchase frequency and customer lifespan. For SaaS, divide monthly ARPU by monthly churn. Apply gross margin when comparing LTV with CAC.

How is LTV:CAC calculated?

Divide margin-adjusted customer lifetime value by customer acquisition cost. Enter the target ratio that fits your margin, cash flow, and risk tolerance.

How is CAC payback period calculated?

Divide CAC by monthly gross profit per customer. Ecommerce monthly gross profit is estimated from annual purchase frequency; SaaS uses monthly ARPU times gross margin.