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Customer Lifetime Value Calculator

Estimate how much revenue a typical customer may generate over the course of their relationship with your business.

Your Details

Include Gross Margin

Choose whether to show CLV adjusted for gross margin.

Overview

A Customer Lifetime Value Calculator helps you estimate how much revenue an average customer may generate over time. By entering average order value, purchase frequency, customer lifespan and gross margin, you can get a simple CLV estimate to support marketing and retention planning.

How it works

The calculator first estimates annual revenue per customer by multiplying average order value by purchase frequency. It then multiplies that annual figure by customer lifespan to estimate lifetime revenue. If you want a profit-based view, it applies your gross margin percentage to the lifetime revenue to produce a margin-adjusted customer lifetime value.

How to use this calculator

  1. 1Enter your average order value.
  2. 2Add how many times an average customer purchases each year.
  3. 3Enter the average customer lifespan in years.
  4. 4Input your gross margin percentage.
  5. 5Review the estimated lifetime revenue and margin-adjusted customer lifetime value.

Example Calculation

Average Order Value

$75

Purchase Frequency

4

Customer Lifespan

3

Gross Margin

60%

Include Gross Margin

yes

Customer Lifetime Revenue

$900.00

With an average order value of 75, four purchases per year and a customer lifespan of 3 years, estimated lifetime revenue is 900. Applying a 60% gross margin gives a margin-adjusted customer lifetime value of 540.

Frequently asked questions

What does this Customer Lifetime Value Calculator estimate?

It estimates the total revenue an average customer may generate over the time they remain a customer, and it can also show a gross-margin-adjusted value.

Is customer lifetime value the same as profit?

Not always. Basic CLV often refers to revenue. Profit-based CLV usually applies a margin or subtracts additional costs.

Why is gross margin included?

Gross margin helps turn a revenue estimate into a more useful value estimate by showing how much of that revenue may remain after direct costs.

Does this calculator include customer acquisition cost?

No. This version focuses on revenue and gross-margin-adjusted value. Acquisition cost is not included unless you account for it separately.

How can I improve customer lifetime value?

Common ways include increasing average order value, improving repeat purchase rate and keeping customers for longer.

Should I use yearly purchase frequency?

Yes. Enter the average number of purchases an average customer makes per year for the most consistent result.

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Assumptions and warnings

Assumptions

  • This calculator uses average order value, purchase frequency and customer lifespan to estimate customer lifetime revenue.
  • The margin-adjusted result assumes your gross margin stays consistent over the customer's lifespan.
  • Results are averages and do not reflect differences between individual customers or customer segments.
  • The calculation does not include customer acquisition cost, refunds, discounts, taxes or overheads unless they are already reflected in your inputs.