Customer Lifetime Value Calculator: Worth Per Customer

What does a $3,000.00 customer lifetime value mean?

On the defaults — a $50 average order, 12 purchases a year and a 5-year lifespan — each customer is worth $3,000.00 over five years, which means the average customer hands the business three thousand dollars before they stop buying. The value is the order value times how often they buy, times how many years they stay: $50 × 12 × 5 = $3,000.00. A value of $3,600.00 means the customer is worth six hundred dollars more, and a value of $2,400.00 means six hundred dollars less — the higher the value, the more the business can afford to spend winning that customer.

Three things about the model are worth stating plainly.

First, the multiplication is $50 × 12 × 5 = $3,000.00. Second, the meaning is three thousand dollars per customer over five years — the value of one customer, not the profit on one order. And third, the value is displayed to two decimals, half-up, and a value that displays as $2,360.14 can sit a hair below the displayed figure: a $49.95 order, 10.5 purchases a year and 4.5 years gives 2360.1375, which displays as $2,360.14 — all listed in Accuracy & limitations.

The worked example, line by line

Setup: average order $50, 12 purchases a year, 5-year lifespan.

Line 1 — the yearly spend. $50 × 12 = $600.00 a year.

Line 2 — the lifetime value. $600.00 × 5 = $3,000.00.

Line 3 — the check. At a $60 order the value is $3,600.00; and at $59 it is $3,540.00 — below $3,600.00.

Every branch, checked

Order value $60: average order $60.00; 12 purchases a year; 5-year lifespan; customer lifetime value $3,600.00 — With a $60 order the value rises to $3,600.00.

Order value $40: average order $40.00; 12 purchases a year; 5-year lifespan; customer lifetime value $2,400.00 — With a $40 order the value falls to $2,400.00.

Purchases 10 a year: average order $50.00; 10 purchases a year; 5-year lifespan; customer lifetime value $2,500.00 — With 10 purchases a year the value falls to $2,500.00.

Purchases 15 a year: average order $50.00; 15 purchases a year; 5-year lifespan; customer lifetime value $3,750.00 — With 15 purchases a year the value rises to $3,750.00.

Lifespan 3 years: average order $50.00; 12 purchases a year; 3-year lifespan; customer lifetime value $1,800.00 — Over 3 years the value falls to $1,800.00.

Lifespan 7 years: average order $50.00; 12 purchases a year; 7-year lifespan; customer lifetime value $4,200.00 — Over 7 years the value rises to $4,200.00.

The reverses, worked backwards

Smallest order value for the CLV to REACH $3,600.00: At the displayed $60 the figures are average order $60.00; 12 purchases a year; 5-year lifespan; customer lifetime value $3,600.00. At $60 the value is exactly $3,600.00 — on the line. At $59 the value is $3,540.00 — below the target — so $60 is the smallest order value for the value to reach $3,600.00.

Largest lifespan for the CLV to STAY at or below $2,400.00: At the displayed 4 years the figures are average order $50.00; 12 purchases a year; 4-year lifespan; customer lifetime value $2,400.00. At 4 years the value is exactly $2,400.00 — on the line. At 5 years the value is $3,000.00 — above the target — so 4 years is the largest lifespan for the value to stay at or below $2,400.00.

Smallest purchases a year for the CLV to REACH $3,600.00: At the displayed 15 a year the figures are average order $50.00; 15 purchases a year; 5-year lifespan; customer lifetime value $3,750.00. At 15 purchases a year the value is $3,750.00 — above the target, because purchases are whole. At 14 purchases a year the value is $3,500.00 — below the target — so 15 a year is the smallest purchases a year for the value to reach $3,600.00.

Largest order value for the CLV to STAY at or below $2,500.00: At the displayed $41 the figures are average order $41.00; 12 purchases a year; 5-year lifespan; customer lifetime value $2,460.00. At $41 the value is $2,460.00 — below the target. At $42 the value is $2,520.00 — above the target — so $41 is the largest order value for the value to stay at or below $2,500.00.

Smallest lifespan for the CLV to REACH $4,200.00: At the displayed 7 years the figures are average order $50.00; 12 purchases a year; 7-year lifespan; customer lifetime value $4,200.00. At 7 years the value is exactly $4,200.00 — on the line. At 6 years the value is $3,600.00 — below the target — so 7 years is the smallest lifespan for the value to reach $4,200.00.

Largest purchases a year for the CLV to STAY at or below $3,000.00: At the displayed 12 a year the figures are average order $50.00; 12 purchases a year; 5-year lifespan; customer lifetime value $3,000.00. At 12 purchases a year the value is exactly $3,000.00 — on the line. At 13 purchases a year the value is $3,250.00 — above the target — so 12 a year is the largest purchases a year for the value to stay at or below $3,000.00.

A warning about the neighbours: every neighbour above sits one dollar, one purchase or one year from the star, and every neighbour value is a plain whole-dollar figure — the value is a product of three numbers, so the neighbours land exactly where the arithmetic says. The CLV is linear in each input, so every reverse has an exact closed form: the order value needed is the target divided by the purchases times the lifespan, and the lifespan allowed is the target divided by the order value times the purchases. The page prints the unrounded value in full so the rounding does not mislead you: 2360.1375.

What the defaults assume

The defaults are a $50 average order, 12 purchases a year and a 5-year lifespan — average order $50.00; 12 purchases a year; 5-year lifespan; customer lifetime value $3,000.00. With Order value $60, average order $60.00; 12 purchases a year; 5-year lifespan; customer lifetime value $3,600.00. With Order value $40, average order $40.00; 12 purchases a year; 5-year lifespan; customer lifetime value $2,400.00. With Purchases 10 a year, average order $50.00; 10 purchases a year; 5-year lifespan; customer lifetime value $2,500.00. With Purchases 15 a year, average order $50.00; 15 purchases a year; 5-year lifespan; customer lifetime value $3,750.00. With Lifespan 3 years, average order $50.00; 12 purchases a year; 3-year lifespan; customer lifetime value $1,800.00. With Lifespan 7 years, average order $50.00; 12 purchases a year; 7-year lifespan; customer lifetime value $4,200.00. With All zero, average order $0.00; 0 purchases a year; 0-year lifespan; customer lifetime value $0.00 — no order, no purchases, no years, no value. With Order value $75, 8 purchases a year, 3 years, average order $75.00; 8 purchases a year; 3-year lifespan; customer lifetime value $1,800.00. With Fractional inputs, average order $49.95; 10.50 purchases a year; 4.50-year lifespan; customer lifetime value $2,360.14 (unrounded 2360.1375) (unrounded 2360.1375) — the value displays as $2,360.14. With Order value $500, 24 purchases a year, 10 years, average order $500.00; 24 purchases a year; 10-year lifespan; customer lifetime value $120,000.00. With Order value $0, average order $0.00; 12 purchases a year; 5-year lifespan; customer lifetime value $0.00 — a customer who never pays is worth $0. With Lifespan 0 years, average order $50.00; 12 purchases a year; 0-year lifespan; customer lifetime value $0.00 — no years, no value. With Order value $33.33, 12 purchases a year, 5 years, average order $33.33; 12 purchases a year; 5-year lifespan; customer lifetime value $1,999.80. With 1 purchase a year, average order $50.00; 1 purchases a year; 5-year lifespan; customer lifetime value $250.00. With 1-year lifespan, average order $100.00; 12 purchases a year; 1-year lifespan; customer lifetime value $1,200.00. With Fractional order value, average order $37.49; 9 purchases a year; 6-year lifespan; customer lifetime value $2,024.46. With Order value $29.99, 12 purchases a year, 5 years, average order $29.99; 12 purchases a year; 5-year lifespan; customer lifetime value $1,799.40.

A note on the rounding: the lifetime value is displayed to two decimals, half-up. With the fractional inputs the unrounded value is 2360.1375 — it displays as $2,360.14. The page prints the unrounded value so the rounding does not mislead you.

Output · formula · meaning

Who uses this

• The small-business owner pricing a customer: they learn a $50 order, 12 purchases a year and a 5-year lifespan is worth $3,000.00 per customer — and they check the $60 reverse to see the order value that pushes the value to $3,600.00.
• The marketer setting an acquisition budget: they learn each customer is worth $3,000.00 over five years — and they check the 15-purchases reverse to see how many purchases a year it takes to reach $3,600.00.
• The subscription founder checking churn: they learn a 3-year lifespan is worth only $1,800.00 against a 7-year lifespan at $4,200.00 — and they check the 7-year reverse to see the lifespan that reaches $4,200.00.
• The student learning business math: they learn the value is the order value times the purchases times the lifespan — and they check the $41 reverse to see the largest order value that keeps the value at or below $2,500.00.

Accuracy & limitations

The math is first-principles: the customer lifetime value is the average order value times the purchases per year times the lifespan in years — all in dollars, the value displayed to two decimals half-up. There is NO division in this calculator — no undefined case exists, no input can make the value undefined. At a $0 average order the value is $0.00 — a customer who never pays is worth $0 — and at a 0-year lifespan the value is $0.00 — no years, no value — the calculator shows both figures with notes, never hides them. With the fractional inputs the unrounded value is 2360.1375 — it displays as $2,360.14. What the model cannot do is price the profit: the value is revenue per customer, not profit — it says nothing about what each order costs to fulfil, what it costs to win the customer, or whether the customer pays on time. It also assumes the order value, the purchase rate and the lifespan stay flat — a customer who buys more in year one and less later is worth less than the flat model says. Use it to see what a customer is worth — then check the margins, the acquisition cost and the churn before you decide what to spend to win one.

Frequently asked questions