Customer Lifetime Value Calculator
Enter your average order value, purchase frequency and customer lifespan to get customer lifetime value instantly, plus lifetime profit once you add your gross margin.
Your customer
Customer lifetime value
€585
Total revenue per customer over their lifetime
Lifetime profit
€351
CLV after gross margin
Annual value
€195
Revenue per customer each year
What this means: At this lifetime value, a healthy 3:1 LTV-to-CAC target means you can spend up to about €117 to acquire each customer.
How to calculate and grow customer lifetime value
Customer lifetime value is the total revenue you can expect from a single customer over the entire time they buy from you. The formula is average order value multiplied by purchase frequency multiplied by customer lifespan. A customer who spends €65 per order, three times a year, for three years is worth €585 in lifetime revenue. Apply your gross margin and you get lifetime profit, the figure that actually lands on the bottom line.
CLV matters most when you set it against acquisition cost. A healthy business aims for a CLV-to-CAC ratio of at least 3:1, meaning each customer is worth roughly three times what you paid to win them. Knowing your CLV turns acquisition spend from a gamble into a budget you can defend: if a customer is worth €585, you can confidently invest far more in ads, content and offers than your single-order revenue would suggest.
Two levers move lifetime value the most: how often customers come back, and how much they spend each time. Both are heavily influenced by trust at the moment of purchase. Complete specifications, persuasive descriptions, accurate availability and rich images reduce returns and turn first-time buyers into repeat customers, quietly compounding lifetime value across your entire base.
Calculating CLV for one segment is a useful start, but it only captures a snapshot. WISEPIM's Customer Insights analytics tracks lifetime value live across every customer, segmenting your whole catalog by lifetime value, repeat rate and churn risk, so you can act on where it's growing and protect where it's at risk, instead of recalculating by hand.
You calculated CLV for one segment.
WISEPIM's Customer Insights tracks lifetime value live across every customer, segmenting your whole catalog by repeat rate, churn risk and revenue, so you see exactly where lifetime value is growing and where it's leaking.
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Frequently asked questions
How do I calculate customer lifetime value?
CLV = average order value × purchase frequency × customer lifespan. Multiply how much a customer spends per order by how many orders they place per year, then by how many years they stay. €65 × 3 orders × 3 years gives a €585 lifetime value. Multiply by your gross margin to get lifetime profit.
What is a good CLV-to-CAC ratio?
A healthy benchmark is a 3:1 ratio, each customer should be worth about three times what you spend to acquire them. Below 3:1 your margins get thin once costs are covered; well above 3:1 often means you could afford to spend more on acquisition and grow faster.
Why does CLV matter for acquisition spend?
CLV sets the ceiling on what you can profitably pay for a new customer. If a customer is worth €585 over their lifetime, you can invest far more in ads, content and offers than if they're worth €65 on a single order. It turns acquisition from a guess into a budget you can defend.
How do I increase customer lifetime value?
Drive repeat purchases and bigger baskets. Complete, persuasive product content builds trust and reduces returns, so customers come back instead of churning. WISEPIM enriches and standardizes product data across your whole catalog, lifting both repeat rate and average order value over time.
What's the difference between CLV and average order value?
Average order value is what a customer spends in a single order; CLV is what they spend across their entire relationship with you. AOV is one of the three inputs to CLV, alongside purchase frequency and lifespan. Lifting AOV raises CLV directly, but so does getting customers to buy more often and stay longer.
Should I use gross or net CLV?
Use net CLV (lifetime profit) when comparing against acquisition cost, because you can only spend out of profit, not revenue. Gross CLV (total spend) is fine for sizing a customer's value at a glance. This calculator shows both: the revenue figure and, once you enter gross margin, the lifetime profit.