How to use the Customer Lifetime Value Calculator
Enter the average monthly revenue per customer, your gross margin, your monthly churn rate and what it costs to win one customer. Lifetime is estimated as one divided by churn.
Customer lifetime value
$1,600
- Average customer lifetime
- 33.3 months
- LTV : CAC
- 4 : 1
Healthy. A ratio of 3 : 1 or better is a common target.
Frequently asked questions
What is a good LTV to CAC ratio?
A common target is 3 : 1 or higher. Below 1 : 1 means you spend more to win customers than they ever pay back.
Why use gross margin instead of revenue?
Revenue includes costs like hosting and support. Gross margin shows what a customer actually contributes.
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