Customer lifetime value (LTV)
LTV estimates the gross‑margin adjusted revenue per customer over their lifetime. Formula: LTV = ARPU × gross margin × (1 ÷ monthly churn).
Inputs
Enter ARPU, monthly churn, and gross margin.
Summary
Gross‑margin adjusted lifetime value and implied lifetime.
LTV
$473.14
ARPU
$20.70
Churn
3.5%
Gross margin
80.0%
LTV basics
LTV estimates the revenue you earn per customer over their lifetime, adjusted for gross margin. It depends heavily on churn.
How to use the calculator
- Enter ARPU (from your ARPU calculator or billing data).
- Enter monthly churn rate as a percentage.
- Set gross margin to reflect your product’s cost of goods sold.
Interpreting results
- Implied lifetime: 28.6 months.
- LTV today: $473.14. Compare to CAC to evaluate payback.
Pitfalls
- Using revenue instead of gross margin—adjust for COGS.
- Mixing customer churn with revenue churn—be consistent with definitions.
Related metrics
- CAC and CAC payback period
- ARPU and churn
- Net revenue retention