Customer Lifetime Value (LTV)
Calculate how much revenue a customer brings over their lifetime and analyze your LTV/CAC ratio.
Customer Lifetime Value (LTV) Calculator
This calculator is for informational purposes only. Results are estimates and may differ from actual values.
LTV Guide
How Is LTV Calculated?
Simple LTV = ARPU / Churn Rate. With gross margin: LTV = (ARPU x Gross Margin) / Churn Rate. Avg. customer lifetime = 1 / Churn Rate.
LTV = ARPU / Churn | LTV(GM) = (ARPU × GM%) / Churn Why Is LTV/CAC Ratio Important?
LTV/CAC ratio shows customer unit economics. Below 3x is unsustainable. 3-5x is healthy, above 5x is excellent. Below 1x means losing money on every customer.
How to Increase LTV?
- Reduce churn — biggest lever. 5% to 2% churn increases LTV 2.5x.
- Increase ARPU — pricing optimization, upsell, cross-sell.
- Improve onboarding — early-stage churn is highest.
- Build customer success team — proactive support increases retention.
Info
LTV (Lifetime Value) is the total revenue a customer brings during their relationship with your business. It forms the basis for marketing budget, pricing, and growth strategy decisions.
In SaaS, 3:1 is considered the minimum healthy ratio. You should get at least 3 TL lifetime value for every 1 TL customer acquisition cost. Above 5:1 is ideal.
Recovering customer acquisition cost within 12 months is recommended. 18+ month payback creates cash flow issues. Payback = CAC / (ARPU x Gross Margin).
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