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LTV Calculator

LTV is customer lifetime value: what a customer is worth over time. A simple version is average order × purchases per year × years. Pair it with CAC so acquisition has a ceiling.

The tool

Try it here

Use this when you have order value, repeat rate, and a time horizon you can defend. If you only have the first invoice, say first-order value, not LTV.

What a customer is worth over time

LTV

Pair LTV with CAC. A 3:1 ratio is a common floor, not a law.

Why it helps

Why you need a LTV Calculator

CAC without LTV is a number with no ceiling. ₹8,000 to acquire is fine or fatal depending on value.

Fake LTV multiplies a best month by 12 and ignores churn. Use observed repeat and a conservative horizon.

Margin matters. Gross LTV is not contribution after COGS. Say which you are using.

CPA ≠ CAC ≠ LTVCPA ≠ CAC ≠ LTVCPAads / actionCACall cost / customersLTVvalue over timeDo not put CPA in a board slide labelled CAC.LTV without CAC is a vanity number. Ratio is the decision.
Name the conversion. Unnamed math flatters newsletter signups.

When

When to use it

  • When you set or revisit an LTV:CAC rule.
  • When first-order ROAS looks strong and churn is high.
  • When lead value needs a customer-value input you can explain.

How

How to use it

  1. 1Enter average order value, purchases per year, and years (or a churn-based horizon).
  2. 2LTV ≈ AOV × frequency × years. Optional: multiply by gross margin.
  3. 3Compare to CAC from the same motion.
  4. 4If data is thin, report first-order contribution after CAC and do not call it LTV.

Example

Example: Acme subscription-ish LTV

Average plan ₹10,000 per year. Customers stay about 3 years. CAC was ₹10,000 in the Q3 example. google-in-demo-exact-2026q3 is the paid motion, not the LTV formula.

You put in

AOV / year
₹10,000
Years
3
Gross margin
80%

You get

Gross LTV ≈ 10000 × 3 = ₹30,000
Contribution LTV ≈ 30000 × 0.80 = ₹24,000
Vs CAC ₹10,000 - about 2.4× contribution, 3× gross

Say which LTV you used in the review. 3× gross against ₹10,000 CAC looks fine; 2.4× after margin is tighter. Do not mix them on one slide. ROAS still decides this week’s budget. LTV:CAC decides if the channel stays.

Result

What this changes for you

CAC gets a comparison. You stop scaling a 4× ROAS (return on ad spend) that still loses on lifetime margin.

Common mistakes

  • Calling first-order revenue LTV.
  • A 10-year horizon with no churn evidence.
  • Comparing LTV to CPA. CPA is often per lead.
  • Including expansion revenue you have not seen yet as if it were guaranteed.

FAQ

LTV Calculator FAQ

How does an LTV calculator work?

A simple LTV is average order × purchases per year × years. Optional margin. Compare the result to CAC. Do not invent years you have not observed.

What is a good LTV from an LTV calculator vs CAC?

A common working rule is LTV at least 3× CAC, using real repeat and churn. A slide that multiplies hope by 12 months does not count.

Should an LTV calculator use revenue or profit?

Say which. Gross LTV is revenue. Contribution LTV applies margin. CAC comparisons are cleaner on contribution if you have COGS.

Is LTV from an LTV calculator the same as ROAS?

No. ROAS is attributed ad revenue ÷ media cost for a window. LTV is customer value over time. Use ROAS to scale this week. Use LTV with CAC to keep the channel.

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