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Customer Lifetime Value (LTV) Calculator

Calculate how much revenue a single customer will generate over their entire relationship with your SaaS.

SaaS
Business
Customer

Customer Metrics

About This Tool

Customer Lifetime Value (LTV) is the total revenue you can expect from a single customer account. It is a fundamental SaaS metric that informs pricing, acquisition strategy, and product investment decisions. Higher LTV means you can spend more to acquire customers and still be profitable.

Pair this calculator with the CAC Payback Calculator to understand your unit economics and the Retention Rate Calculator to track and improve your retention over time.

All calculations happen in your browser — no data is sent to any server.

How It Works

Average Lifetime (months) = 1 / (Churn Rate / 100)
LTV = ARPU × Average Lifetime × (Gross Margin / 100)

The formula assumes constant churn and revenue, which is a reasonable approximation for most SaaS businesses. The lifetime calculation is based on expected value: with a 5% monthly churn, the average customer stays 20 months. A 2% monthly churn yields 50 months.

Frequently Asked Questions (FAQ)

What is Customer Lifetime Value (LTV)?
LTV is the total revenue you can expect from a single customer account over the entire business relationship. It is one of the most important SaaS metrics because it tells you how much you can afford to spend on acquisition while remaining profitable.
What is a good LTV:CAC ratio?
A 3:1 LTV:CAC ratio is considered healthy in SaaS. If your ratio is below 3:1, you may be spending too much on acquisition. If it is significantly higher, you may be under-investing in growth. Use our CAC Payback Calculator to assess your acquisition efficiency.
What churn rate should I target?
For SaaS, a monthly churn rate below 2% (24% annual) is good, and below 1% is excellent. Enterprise SaaS often targets churn under 0.5%/month. Reducing churn has an outsized impact on LTV. See our Retention Rate Calculator to measure and optimize retention.
How can I increase my LTV?
You can increase LTV by: (1) raising ARPU through upselling or price increases, (2) improving gross margins by reducing COGS, or (3) lowering churn through better onboarding and customer success. Even a small improvement in churn can dramatically change LTV because of the formula relationship.

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