Enter your customer numbers below.
What a customer typically spends in a single order.
Orders per customer per year.
How many years the average customer keeps buying.
Share of each sale left after cost of goods sold.
Because a profit margin is applied, CLV here is profit, not revenue. Lifetime revenue is listed above it so the two are not mistaken for each other.
See how Mage helps Shopify brands lift repeat purchase rate with loyalty, referrals and store credit.
Customer lifetime value is the total profit a business earns from the average customer across the entire relationship, rather than from a single order. It tells you how much you can afford to spend acquiring a customer and still come out ahead.
Multiply average purchase value by purchase frequency per year to get annual customer value. Multiply that by average customer lifespan in years for lifetime revenue, then multiply by your profit margin. For example: $100 average order, 4 orders a year, 3 year lifespan and a 20% margin gives $100 x 4 x 3 x 0.20, which is $240.
None in practice. Customer lifetime value, CLV, LTV and lifetime value all describe the same measure. Be careful searching for LTV in a finance context, where it usually means loan to value instead.
Profit, which is why this calculator asks for a margin. Revenue-based CLV flatters itself: a customer generating $1,200 of lifetime revenue on a 20% margin is only worth $240 to the business. Comparing revenue CLV against acquisition cost is how brands convince themselves unprofitable spend is working.
Divide total orders in a period by the number of unique customers in that same period. If 800 customers placed 2,400 orders last year, average frequency is 3 orders per customer per year.
If you have a few years of order data, measure the average time between a customer's first and last order among lapsed customers. If you do not, a reasonable proxy is 1 divided by your annual churn rate: a 40% annual churn implies roughly a 2.5 year lifespan. Most ecommerce brands should start at 1 to 3 years rather than guessing high.
A CLV to CAC ratio of about 3 to 1 is the widely used benchmark, meaning each customer returns three times what you paid to acquire them. Below 1 to 1 you lose money on every customer. Far above 3 to 1 often means you are underinvesting in growth rather than running an especially good business.
Only if you build them in. The cleanest approach is to use net figures: an average order value after discounts, and a profit margin that already reflects returns, refunds and shipping costs. Otherwise CLV will read higher than what actually reaches your bank account.
Because CLV scales directly with it. Doubling margin doubles CLV without a single extra order. It is also why two businesses with identical revenue per customer can have completely different amounts to spend on acquisition.
Three levers, in rough order of ease: increase purchase frequency by giving customers a reason to return sooner, extend lifespan by reducing churn, and raise average order value. Frequency and lifespan usually move furthest, because a repeat order carries no acquisition cost and converts almost entirely to margin. Loyalty programs, referrals and store credit are the standard tools for both.
Quarterly is enough for most brands, or whenever pricing, product mix or acquisition channels change materially. CLV is a planning figure rather than a live metric, so chasing weekly movements adds noise rather than insight.
Yes. No signup, no email and no limits. It is built by Mage Loyalty, a loyalty, referrals and store credit app for Shopify.
Mage is a loyalty, referral and store credit app built for Shopify. Reward repeat purchases, run VIP tiers, and give customers a reason to come back, without writing a line of code.
