Customer's LTV (CLV) calculator

Calculate the customer's lifetime value to understand how much value each customer brings. Keep in mind that you should aim for a CLV that is at least 3 times higher than your customer acquisition cost (CAC).

LTV Calculator

Quick intro to CLV

Customer Lifetime Value (CLV or LTV) is a metric that estimates the total revenue a business can expect from a single customer over the entire duration of their relationship. A higher CLV means each customer brings more value to the company, making it a key factor in achieving profitability and sustainable growth.

CLV is important in e-commerce because it helps store owners understand how much value each customer brings over time, not just from a single purchase. By knowing CLV, businesses can make smarter decisions about how much to spend on acquiring and retaining customers.

Ideal CLV

There isn’t a single “ideal” CLV in e-commerce. It depends on your product type, pricing, and business model.

However, a healthy CLV should be at least 3 times higher than your Customer Acquisition Cost (CAC).

Best way to optimize it

To optimize CLV, focus on improving customer experience and building loyalty through excellent support, personalized offers, and reward programs that encourage repeat purchases. Use strategies like upselling, cross-selling, and targeted email marketing to increase the value each customer brings.

A guy in the office calculating gross profit margin on his laptop.

How to calculate customer LTV (CLV)?

To calculate Customer Lifetime Value (CLV), multiply the average order value by the average number of purchases a customer makes over their relationship with your store.

Formula: CLV = Average Order Value × Average Purchase Frequency

Customer LTV (CLV) FAQs

What is Customer Lifetime Value (CLV) and why does it matter in e-commerce?

Customer Lifetime Value (CLV) represents the total revenue a business expects to earn from a typical customer throughout their relationship with the company. In e-commerce, CLV is important because it helps you understand how valuable each customer is over time, not just after a single purchase.

The general rule of thumb is that CLV should be at least 3 times higher than your customer acquisition cost (CAC).  For most e-commerce stores this means a CLV in the range of $30 - $150.

How does CLV affect my marketing and advertising strategy?

CLV helps you determine how much you can spend to acquire a new customer while still remaining profitable. If your CLV is high, you can afford to invest more in marketing and customer acquisition. Tracking CLV also lets you identify and segment high-value customers for targeted marketing campaigns, helping you get better returns on your advertising spend.

How often should I measure or update my store’s CLV, and why?

You should review and update your store’s CLV regularly – at least once per quarter or after major marketing initiatives and product launches. Customer behavior and market conditions can change, so keeping your CLV calculations up-to-date ensures your budgeting, acquisition, and retention strategies are based on the most accurate information.

What are the most effective ways to increase CLV in e-commerce?

You can increase your CLV by:

  • Using personalized email marketing
  • Offering loyalty and rewards programs
  • Upselling and cross-selling related products
  • Offering excellent customer service
  • Creating engaging content or post-purchase experiences that keep customers coming back
What’s the difference between LTV and CLV?

LTV (Lifetime Value) and CLV (Customer Lifetime Value) are terms that are often used interchangeably in e-commerce and marketing. Both refer to the total revenue a business can expect from a customer over the entire duration of their relationship. In most cases, there is no difference between the two, and they are simply different ways of naming the same metric.