How this calculator works
This simple model assumes constant order size, frequency, lifetime and gross margin. It excludes discounting, retention costs, churn timing, refunds and changes in behavior. It is a planning estimate, not a forecast for a particular customer.
The formula
Revenue LTV = order value × purchases per year × lifetime. Gross-profit LTV = revenue LTV × margin/100.A quick example
An order value of 100, four purchases a year and a three-year lifetime give revenue LTV of 1,200. At 40% gross margin, gross-profit LTV is 480.
How to use this calculator
- Choose the settings that match your scenario, using the units shown beside each field.
- Enter average order value, purchases per year, average customer lifetime (years), gross margin (%).
- Calculate, then review the method and assumptions alongside the results.
A few common questions
Which LTV should I compare with CAC?
Gross-profit LTV is more informative than revenue LTV, but it still omits retention costs, discounting and uncertainty.
Can the average hide differences between customers?
Yes. Compare consistent cohorts when purchase patterns or acquisition channels differ.