Customer LTV Calculator
Calculate your customer lifetime value, maximum profitable CAC and LTV:CAC ratio for your e-commerce store. Free, no signup required.
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Average amount per order, excluding taxes and shipping.
Average number of orders per customer per year.
How many years a customer stays active on average.
Average gross margin after COGS, excluding ad spend.
Actual profit per customer after applying gross margin.
Total revenue generated by a customer over their lifetime.
Maximum acquisition cost for a 3:1 LTV:CAC ratio, considered healthy in e-commerce.
Average revenue generated per customer each year.
What LTV is and why it changes everything
LTV (Lifetime Value) is the revenue a customer generates over their entire lifetime with your brand. It's the only metric that tells you how much you can really spend to acquire a customer without losing money. A healthy LTV:CAC ratio is around 3:1: every dollar spent on acquisition should return at least 3 dollars of net profit over the customer's lifetime.
$80 × 2 orders/year × 3 years = $480 gross LTV
$480 × 30% = $144 real profit per customer
$144 / 3 = $48 maximum profitable CAC
What LTV:CAC ratio to aim for
The LTV:CAC ratio is the most reliable indicator to drive your acquisition profitability.
| LTV:CAC ratio | Diagnosis | Recommended action |
|---|---|---|
| < 1:1 | Every customer costs more than they earn | Urgent stop, full acquisition audit |
| 1:1 to 2:1 | Unprofitable medium-term | Optimize conversion and retention before scaling |
| 3:1 | Healthy ratio, e-commerce standard | Continue, look to scale intelligently |
| 4:1 and above | Excellent, growth potential | Increase acquisition budgets |
| > 6:1 | Likely underinvesting | Scale more aggressively to capture market |
Four levers to increase your LTV
LTV is built on four dimensions. Moving any one of them mechanically changes your acquisition economics.
Increase average order value
Upsells, cross-sells, bundles, free shipping thresholds. Every dollar added to the cart multiplies by the total number of orders.
Increase purchase frequency
Email marketing, SMS, subscriptions, loyalty programs. A customer going from 2 to 3 orders per year increases your LTV by 50%.
Extend customer lifespan
Customer service, product onboarding, automated reengagement. Going from 2 to 3 years of lifespan increases your LTV by 50%.
Improve gross margin
COGS, transaction fees, shipping. A margin going from 25% to 35% increases your net LTV by 40%.
Frequently asked questions
What is LTV in e-commerce?+
LTV (Lifetime Value or Customer Lifetime Value) is the total revenue a customer generates over their entire lifetime with your brand. It tells you how much you can spend to acquire a customer and stay profitable.
What's the difference between gross and net LTV?+
Gross LTV is the total revenue generated by a customer (AOV × frequency × lifespan). Net LTV applies your gross margin to get the actual profit per customer. Net LTV is what matters to drive your maximum CAC.
What LTV:CAC ratio should I aim for?+
The e-commerce standard is 3:1. Below that, you're marginal. Above 4:1 you have room to scale. Above 6:1 you're likely underinvesting in acquisition.
How do I improve my LTV?+
Four levers: increase AOV (upsells, bundles), increase purchase frequency (email, subscriptions), extend lifespan (retention, CS), improve gross margin (COGS, transactions).
Does the calculation account for refunds?+
No, this calculator uses the gross values you enter. For automated calculation including refunds, real COGS and acquisition segments, Fullmetrix does it on all your orders in real time.
Related pages
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Guides
Track your customer LTV automatically
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