{
  "id": "customer-lifetime-value",
  "version": "0cf3e462cf0b",
  "status": "published",
  "name": "Customer Lifetime Value Calculator",
  "question": "What is my customer lifetime value?",
  "summary": "Computes customer lifetime value (CLV): the yearly profit from one customer × the years they stay − the cost to acquire them, from order value, orders a year and profit margin or from a yearly profit.",
  "category": "finance",
  "subcategory": "business",
  "url": "https://www.acalculator.org/finance/customer-lifetime-value-calculator",
  "markdown": "https://www.acalculator.org/finance/customer-lifetime-value-calculator.md",
  "kind": "function",
  "method": "CLV = profit per customer per year × years as a customer − acquisition cost; from orders, profit per year = average order value × orders per year × profit margin ÷ 100.",
  "assumptions": [
    "Profit is after the cost of the goods sold; other costs, such as overheads, are not taken off.",
    "Future profit is not discounted: a dollar in a later year counts the same as a dollar today.",
    "Arithmetic is exact on the typed decimals; money shows to the cent, halves up."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "from": {
        "title": "I know the",
        "description": "Whether you know the order value, orders a year and margin, or the yearly profit per customer.",
        "type": "string",
        "enum": [
          "orders",
          "profit"
        ]
      },
      "aov": {
        "title": "Average order value",
        "description": "What a customer spends per order, on average.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000
      },
      "orders": {
        "title": "Orders per year",
        "description": "How many orders one customer places in a year, on average.",
        "type": "number",
        "minimum": 0,
        "maximum": 1000000
      },
      "margin": {
        "title": "Profit margin",
        "description": "The share of each sale left after the cost of the goods sold (the gross margin).",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 100
      },
      "profit": {
        "title": "Profit per customer per year",
        "description": "The profit one customer brings in a year, after the cost of the goods sold.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "years": {
        "title": "Years as a customer",
        "description": "How many years a customer keeps buying, on average.",
        "type": "number",
        "minimum": 0,
        "maximum": 100
      },
      "cac": {
        "title": "Acquisition cost",
        "description": "What it costs to win one new customer (CAC). Enter 0 to leave it out.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      }
    }
  },
  "outputs": {
    "clv": {
      "label": "Customer lifetime value",
      "description": "Profit per customer per year × years as a customer − acquisition cost.",
      "format": "money"
    },
    "annualProfit": {
      "label": "Profit per customer per year",
      "description": "Revenue per customer per year × profit margin, or as typed.",
      "format": "money"
    },
    "lifetimeProfit": {
      "label": "Lifetime profit before acquisition cost",
      "description": "Profit per customer per year × years.",
      "format": "money"
    },
    "revenue": {
      "label": "Revenue per customer per year",
      "description": "Average order value × orders per year.",
      "format": "money"
    },
    "lifetimeRevenue": {
      "label": "Lifetime revenue per customer",
      "description": "Revenue per customer per year × years.",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "from": "orders",
      "aov": 50,
      "orders": 6,
      "margin": 40,
      "profit": 120,
      "years": 3,
      "cac": 40
    },
    "outputs": {
      "clv": 320,
      "annualProfit": 120,
      "lifetimeProfit": 360,
      "revenue": 300,
      "lifetimeRevenue": 900
    },
    "text": "A customer who brings $120.00 of profit a year for 3 years, less $40.00 to acquire, has a lifetime value of $320.00."
  },
  "examples": [
    {
      "given": {
        "from": "profit",
        "profit": 10000,
        "years": 12,
        "cac": 750
      },
      "expect": {
        "clv": 119250,
        "lifetimeProfit": 120000
      },
      "source": "OpenStax, Principles of Marketing, 2.4 Marketing Plan Progress Using Metrics, Table 2.1 (CLV = annual profit per customer × average number of years retained − customer acquisition cost). https://openstax.org/books/principles-marketing/pages/2-4-marketing-plan-progress-using-metrics: (10,000 × 12) − 750 = 119,250"
    },
    {
      "given": {
        "from": "profit",
        "profit": 22000,
        "years": 8,
        "cac": 1200
      },
      "expect": {
        "clv": 174800
      },
      "source": "OpenStax, Principles of Marketing, 2.4 Marketing Plan Progress Using Metrics, Table 2.1 (CLV = annual profit per customer × average number of years retained − customer acquisition cost). https://openstax.org/books/principles-marketing/pages/2-4-marketing-plan-progress-using-metrics: (22,000 × 8) − 1,200 = 174,800"
    },
    {
      "given": {
        "from": "profit",
        "profit": 34000,
        "years": 8,
        "cac": 1600
      },
      "expect": {
        "clv": 270400
      },
      "source": "OpenStax, Principles of Marketing, 2.4 Marketing Plan Progress Using Metrics, Table 2.1 (CLV = annual profit per customer × average number of years retained − customer acquisition cost). https://openstax.org/books/principles-marketing/pages/2-4-marketing-plan-progress-using-metrics: (34,000 × 8) − 1,600 = 270,400"
    },
    {
      "given": {
        "from": "orders",
        "aov": 50,
        "orders": 6,
        "margin": 40,
        "years": 3,
        "cac": 40
      },
      "expect": {
        "revenue": 300,
        "annualProfit": 120,
        "lifetimeRevenue": 900,
        "lifetimeProfit": 360,
        "clv": 320
      },
      "source": "OpenStax, Principles of Marketing, 2.4 Marketing Plan Progress Using Metrics, Table 2.1 (CLV = annual profit per customer × average number of years retained − customer acquisition cost). https://openstax.org/books/principles-marketing/pages/2-4-marketing-plan-progress-using-metrics; hand calculation in content.mdx: 50 × 6 = 300; 300 × 40% = 120; 120 × 3 − 40 = 320"
    },
    {
      "given": {
        "from": "orders",
        "aov": 20,
        "orders": 2,
        "margin": 25,
        "years": 1,
        "cac": 30
      },
      "expect": {
        "annualProfit": 10,
        "clv": -20
      },
      "source": "OpenStax, Principles of Marketing, 2.4 Marketing Plan Progress Using Metrics, Table 2.1 (CLV = annual profit per customer × average number of years retained − customer acquisition cost). https://openstax.org/books/principles-marketing/pages/2-4-marketing-plan-progress-using-metrics; hand calculation in content.mdx: 20 × 2 × 25% = 10; 10 × 1 − 30 = −20"
    }
  ],
  "sources": [
    "OpenStax, Principles of Marketing, 2.4 Marketing Plan Progress Using Metrics: CLV = (annual profit per customer × average number of years retained) − customer acquisition cost, with Table 2.1. https://openstax.org/books/principles-marketing/pages/2-4-marketing-plan-progress-using-metrics (retrieved 2026-10-18)"
  ],
  "related": [
    "cac",
    "churn-rate",
    "aov",
    "roas"
  ],
  "changelog": []
}