Customer Lifetime Value (LTV) Calculator
Calculate your customer's lifetime value to determine your maximum acquisition cost and optimize your retention strategy.
Unit Economics
The average amount a customer spends per order.
Your profit after all variable costs per order.
Orders per year on average.
Years a customer stays active.
Cost to acquire a new customer (Ad spend / New Customers).
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Customer Lifetime Value (LTV) Calculator
Calculate your maximum acquisition cost (CAC) and retention value. The secret weapon for scaling subscription and high-repeat ecommerce brands.
The Shopify LTV Formula
Most actionable formula for growth-focused e-commerce brands:
By increasing your purchase frequency from 1 to 2, you literally double your LTV. This allows you to pay 2x more to acquire a customer (CAC) and remain equally profitable.
The Golden Ratio: LTV to CAC
- ✕1:1 RatioYou are trading dollars. Dangerous territory.
- !2:1 RatioBreakeven after operating expenses. Hard to scale.
- ✓3:1 Ratio (Target)The Benchmark. Healthy, scalable profit.
- ★5:1+ RatioCash cow. You are likely under-spending on ads.
Frequently Asked Questions
Customer Lifetime Value (LTV or CLV) is the total profit you expect to earn from a customer over their entire relationship with your business. It's calculated by multiplying your profit margin per order by purchase frequency and customer lifespan.
