Business & Sales

What Is Customer Lifetime Value (CLV)?

Customer lifetime value (CLV or LTV) is an estimate of the total profit or revenue a business can expect from a single customer over the entire relationship. It helps decide how much can reasonably be spent to acquire and keep customers.

A Simple Formula

CLV ≈ average order value × purchases per year × average years as a customer × gross margin. For subscriptions, a common estimate is monthly revenue per customer × gross margin ÷ monthly churn rate.

CLV and CAC

A CLV well above CAC suggests customer acquisition is sustainable.

🧮 Calculate It Yourself

Put Customer Lifetime Value (CLV) into practice with these free calculators — no sign-up, nothing stored.

🏷️ Markup & Margin Calculator Find your selling price, or check your real profit margin. Calculate → 📺 Subscription Cost Calculator Add up your subscriptions to see what they really cost per year. Calculate →

🔗 Related Terms

Customer Acquisition Cost (CAC) Churn Rate Average Order Value (AOV) Unit Economics

More Business & Sales Terms

📖 Browse all glossary terms or explore all free calculators.

Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.