Estimate customer lifetime value

For growth and finance teams deciding how much to invest in acquiring, serving or retaining a customer segment.

Project a customer’s gross and adjusted value across the entire relationship with your business to guide acquisition and retention spending.

How to use

Enter the average order value for the customer group you are studying.
Add how many purchases that customer makes in a typical year.
Set the expected lifetime of the relationship in years.
Fill in the gross margin percentage, then calculate to compare gross and adjusted value.

Example

If a customer spends 120 per order, buys three times a year and stays for four years at a 35 percent gross margin, the result helps you judge how much acquisition or retention spending that segment can reasonably support.

Input

Limits and formats

Results depend on your assumptions and are not a forecast of actual customer behaviour.
The margin input adjusts value, but other costs such as support, delivery or refunds are not included.
Keep all amounts in the same currency when comparing segments or scenarios.
Review the figures against your own sales history before making budget decisions.

Where processing happens

All calculations happen inside your browser. The order value, purchase frequency, lifetime and margin you enter stay on your device and are not uploaded or stored.

Frequently asked questions

How is adjusted value different from gross value?

Gross value combines average order value, yearly purchase count and lifetime years. Adjusted value then applies the gross margin percentage, showing the portion of that revenue that remains after the cost of goods is considered.

Can I compare several customer segments?

Yes, run the calculation once per segment and keep the assumptions consistent. Changing one input at a time makes it easier to see which factor, such as purchase frequency or margin, has the strongest effect on value.

Does the result include retention or marketing costs?

No, the tool only uses the inputs you provide. To include retention or marketing costs, keep those figures outside the calculation and subtract them when you set a maximum acquisition cost for the segment.