CLTV Calculator
Calculate Customer Lifetime Value to measure the total revenue a customer brings to your business
Calculate Customer Lifetime Value
Total revenue generated from all customers
Total number of transactions
Total number of unique customers
How long customers stay with your business on average
Example Calculation
Company Alpha Example
Total Revenue: $5,000,000
Number of Purchases: 500,000
Number of Customers: 200,000
Average Customer Lifespan: 1.5 years
Step-by-Step Calculation
1. Average Purchase Value = $5,000,000 ÷ 500,000 = $10
2. Average Purchase Frequency = 500,000 ÷ 200,000 = 2.5
3. Average Customer Value = $10 × 2.5 = $25/year
4. CLTV = $25 × 1.5 years = $37.50
CLTV Components
Average Purchase Value
Revenue per transaction
Total Revenue ÷ Number of Purchases
Purchase Frequency
Purchases per customer per year
Number of Purchases ÷ Number of Customers
Customer Value
Annual value per customer
Purchase Value × Purchase Frequency
Customer Lifespan
Average customer retention period
How long customers stay active
CLTV Tips
Use CLTV to set customer acquisition budgets
Higher CLTV indicates more valuable customers
Focus on increasing purchase frequency and value
Extend customer lifespan through retention strategies
Understanding Customer Lifetime Value (CLTV)
What is CLTV?
Customer Lifetime Value (CLTV) is a metric that measures the total revenue a customer brings to your business throughout their entire relationship with your company. It helps businesses understand the long-term value of their customers and make informed decisions about customer acquisition and retention.
Why is CLTV Important?
- •Determines how much to spend on customer acquisition
- •Identifies most valuable customer segments
- •Guides marketing budget allocation
- •Helps prioritize customer retention strategies
CLTV Calculation Formula
CLTV = Average Customer Value × Average Customer Lifespan
Where: Average Customer Value = Average Purchase Value × Average Purchase Frequency
Improving CLTV
- Increase Purchase Value: Upselling, cross-selling, premium products
- Increase Purchase Frequency: Email marketing, loyalty programs, subscriptions
- Extend Customer Lifespan: Better customer service, retention campaigns
- Reduce Churn: Address pain points, improve user experience