PALLAS / CALCULATOR

Customer Lifetime Value Calculator

Estimate gross-margin customer lifetime value from average order value, purchase frequency, gross margin and expected customer lifespan. Treat the lifespan and frequency figures as assumptions, not forecasts.

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Method & formula

The calculator starts with average order value and purchase frequency to estimate annual revenue per customer. It then applies gross margin and the customer lifespan you enter. If you add CAC, it also shows the LTV:CAC relationship and value left after acquisition cost.

  • Annual revenue per customer = average order value × purchases per year
  • Annual gross margin per customer = annual revenue × gross margin %
  • Customer lifetime value = annual gross margin per customer × customer lifespan years
Example

An average order value of 80, four purchases a year, a 45% gross margin and a three-year lifespan gives annual revenue of 320, annual gross margin of 144 and gross-margin CLV of 432.

FAQ

Is this the same as average order value?

No. AOV describes one order. CLV estimates the gross margin a customer may generate over repeated purchases and an assumed lifespan.

Does this include customer acquisition cost?

It can. Add CAC if you want to see LTV:CAC and value after acquisition cost; leave it blank if you only want gross-margin lifetime value.

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LTV:CAC Ratio Calculator

LTV CAC ratio calculator CLV

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