Customer Lifetime Value (CLV) Calculator [2025]

Impacts Profitability

CLV helps you understand how much you can spend to acquire customers while still remaining profitable.

Improves Customer Acquisition

Knowing your CLV allows you to optimize your customer acquisition strategies and target the most valuable customer segments.

Enhances Customer Retention

CLV highlights the importance of retaining existing customers and building long-term relationships.

Guides Business Decisions

CLV can inform decisions related to product development, marketing, customer service, and overall business strategy.

What is a good CLV?

A "good" CLV depends on your industry, business model, and customer acquisition cost (CAC). Generally, a CLV that is significantly higher than your CAC indicates a healthy business. A common benchmark is a CLV:CAC ratio of 3:1 or higher.

How can I improve my CLV?

• Enhance Customer Experience: Provide excellent customer service, personalize interactions, and make it easy for customers to do business with you.
• Build Customer Loyalty: Implement loyalty programs, reward repeat customers, and foster a strong brand community.
• Increase Customer Engagement: Communicate regularly with customers through email, social media, and other channels.
• Upsell and Cross-sell: Offer relevant products or services that complement customers' previous purchases.
• Reduce Churn: Identify and address the reasons why customers are leaving.

What's the difference between the simple and traditional CLV calculation methods?

The simple method provides a quick estimate of CLV using basic inputs. The traditional method incorporates additional factors like gross margin, retention rate, and discount rate to provide a more refined calculation.