How this calculator works
| Metric | Formula |
|---|---|
| Subscription LTV | monthly revenue per customer × gross margin ÷ monthly churn |
| Repeat-purchase LTV | average order value × orders per year × years × gross margin |
| Discounted subscription LTV | monthly gross profit ÷ (1 − (1 − churn) ÷ (1 + monthly discount rate)) |
| Maximum CAC | LTV ÷ 3 |
Worked example
With these inputs:
- Currency: USD ($)
- Business model: Subscription
- Monthly revenue per customer, or average order value: 80
- Monthly churn (subscription): 3%
- Orders per year (repeat purchases): 4
- Years as a customer (repeat purchases): 3
- Gross margin: 70%
- Annual discount rate: 10%
Customer lifetime value (gross profit): $1,867. Customer lifetime value is about $1,867 in gross profit ($2,667 in revenue) — $80.00 a month × 70% margin ÷ 3% churn. Spend up to about $622 to acquire a customer for a 3:1 LTV:CAC ratio.
| Lifetime revenue per customer | $2,667 |
|---|---|
| Discounted LTV (10% a year) | $1,486 |
| Average customer lifetime | 33.3 months |
| Maximum CAC for 3:1 LTV:CAC | $622 |
| Break-even CAC (1:1) | $1,867 |
Open this example in the calculator
Why use gross profit, not revenue?
Revenue LTV overstates what a customer is worth because it ignores the cost of serving them — hosting, support, products and payment fees. Gross-profit LTV is the amount actually available to pay for acquisition and overheads.
Many published “LTV” figures are revenue-based; check which one you are comparing against.
What LTV is used for
- Setting the maximum you can spend to acquire a customer.
- Comparing channels and customer segments by long-term value, not first order.
- Deciding how much to invest in retention and customer success.
- Valuing the customer base for investors.
How to increase customer lifetime value
- Reduce churn with onboarding and proactive support.
- Offer upgrades, add-ons and annual plans.
- Encourage repeat purchases with email, loyalty and subscriptions.
- Raise prices for the value you deliver, and grandfather loyal customers fairly.
Open this calculator with your numbers
Every option can be set in the web address, so you can bookmark a scenario or send it to a colleague. AI assistants such as ChatGPT, Gemini, Claude and Perplexity can use the same parameters to open this calculator with your numbers and the result already on the page.
| Parameter | What it sets | Accepted values |
|---|---|---|
currency |
Currency | one of USD, INR, AED, GBP, EUR |
model |
Business model | one of subscription, repeat |
value |
Monthly revenue per customer, or average order value | number from 0 to 100000000 (in the chosen currency), default 80 |
churn |
Monthly churn (subscription) | number from 0.01 to 100 (%), default 3 |
orders |
Orders per year (repeat purchases) | number from 0.1 to 365, default 4 |
years |
Years as a customer (repeat purchases) | number from 0.1 to 50, default 3 |
margin |
Gross margin | number from 1 to 100 (%), default 70 |
discount |
Annual discount rate | number from 0 to 50 (%), default 10 |
Also available as plain text for AI assistants and a free JSON API (OpenAPI spec).
Last reviewed by the Infikey Technologies team.
Disclaimer
This calculator is provided free for general information and planning only. Results are estimates based on the inputs you enter and the assumptions described on this page, reference data such as published prices may change, and actual costs and outcomes will differ. Nothing on this page is financial, legal, tax, investment or other professional advice. Infikey Technologies Private Limited, Infikey Technologies LLC and their directors, employees and affiliates make no warranty, express or implied, about the accuracy, completeness or suitability of this tool or its results, and accept no liability for any loss or damage, direct or indirect, arising from its use or from reliance on its results. Verify all figures independently and seek professional advice before making any decision. Use of this tool is at your own risk.