💎 Customer Lifetime Value (LTV)

Calculate customer value and profitability metrics

💎 LTV Formula:

LTV = Average Purchase Value × Purchase Frequency × Customer Lifespan

A healthy LTV:CAC ratio is typically 3:1 or higher, meaning you earn at least €3 for every €1 spent acquiring a customer.

💰 Customer Value Metrics

Average order value per transaction

How many times they buy per year

Average years as a customer

Customer Lifetime Value

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📊 LTV:CAC Analysis

How much you spend to acquire one customer

LTV:CAC Ratio

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💵 Profitability Metrics

Percentage of revenue after direct costs

Gross Profit per Customer

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📊 Value Summary

Lifetime Value

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Acquisition Cost

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Customer Profit

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Payback Period

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💡 Insights

Enter your metrics to see profitability insights

📝 Strategy & Optimization Notes

📚 Recommended Reading

The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World → Check on Amazon

Fred Reichheld

Learn how customer loyalty and retention drive lifetime value and long-term profitability.

Customer Centricity: Focus on the Right Customers for Strategic Advantage

Peter Fader

Strategic framework for identifying and maximizing value from your most profitable customer segments.

Subscribed: Why the Subscription Model Will Be Your Company's Future

Tien Tzuo

Understanding how subscription models maximize customer lifetime value through recurring revenue.

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