Customer LTV Calculator
Calculate Customer Lifetime Value to understand how much you can spend to acquire customers.
Enter Your Metrics
Average revenue per order
How many times a customer buys per year
How long a customer stays active
Your gross margin percentage
Customer Value
Maximum CAC Recommendation
Enter your metrics to see CAC recommendations
How LTV is Calculated
Example: If your average order is $75, customers buy 2.5 times per year, and stay active for 3 years, your LTV is $75 × 2.5 × 3 = $562.50. With a 40% margin, your LTV profit is $225.
Why LTV Matters for Paid Ads
CAC Budgeting
Knowing your LTV lets you calculate the maximum you can spend to acquire a customer profitably. A 3:1 LTV:CAC ratio is considered healthy for sustainable growth.
Channel Evaluation
Compare LTV by acquisition channel to identify which sources bring your most valuable customers, not just the cheapest ones.
Scale Decisions
Higher LTV means you can afford higher CPAs, giving you access to more inventory and the ability to outbid competitors.
Retention Focus
Small improvements in purchase frequency or lifespan can dramatically increase LTV, often more efficiently than acquiring new customers.
E-commerce LTV Benchmarks
| Category | Avg LTV | Avg Purchase Frequency | Avg Lifespan |
|---|---|---|---|
| Fashion & Apparel | $150-$400 | 2-4x/year | 2-3 years |
| Beauty & Skincare | $200-$600 | 4-8x/year | 2-4 years |
| Supplements & Health | $300-$800 | 6-12x/year | 1-3 years |
| Home & Kitchen | $100-$300 | 1-2x/year | 3-5 years |
| Food & Beverage (DTC) | $400-$1,200 | 12-24x/year | 1-2 years |
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