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♻️ Customer Lifetime Value Calculator

Enter your AOV, margin, how often customers buy, and how long they stay to get lifetime value and the most you can afford to spend acquiring one. LTV is the number that lets brands outspend dropshippers.

$0$500
0%95%
0.512
0.5 yrs7 yrs
Revenue LTV
$245.00
Total revenue per customer
Gross Profit LTV
$159.25
What you actually keep
LTV : CAC Ratio
3× or higher is healthy
Max Profitable CAC
$159.25
Most you can spend to acquire
Each customer is worth $159.25 in gross profit over their lifetime — that's the most you can spend acquiring them and still win long-term.
Formula:LTV = AOV × Purchase Frequency × Lifespan (years)
Industry Benchmarks
LTV:CAC 3×+3× or above
LTV:CAC 1–3×1× – 3×
LTV:CAC under 1×Below 1×
Recommended next step

How to use this tool

  1. Enter your average order value. What a customer spends per order on average.
  2. Enter your gross margin. Your product gross margin as a percentage.
  3. Enter purchases per year. How many times an average customer buys in a year.
  4. Enter customer lifespan. How many years an average customer keeps buying.
  5. Read your LTV. The calculator shows lifetime value, lifetime profit, and your maximum sustainable CAC.

Customer Lifetime Value Calculator — explained

Lifetime value is AOV × purchases per year × lifespan. Multiply by margin and you get lifetime profit — the real money a customer represents. Most dropshippers optimise only the first order and leave the bulk of that profit on the table.

LTV sets your maximum CAC. If a customer is worth $90 in profit over two years, you can spend far more than first-order margin to acquire them and still win — as long as you have the cash flow to wait for the back-end revenue.

The levers that raise LTV are retention levers: post-purchase email flows, a second-product offer, subscriptions, and loyalty. A small lift in repeat rate compounds across every customer you have already paid to acquire.

Use this in context

Customer LTV Calculator — common questions

How do you calculate customer lifetime value?
LTV = Average Order Value × Purchases per Year × Customer Lifespan (years). Multiply by gross margin to get lifetime profit per customer.
Why does LTV matter for dropshipping?
LTV sets the ceiling on what you can pay to acquire a customer. A higher LTV lets you outbid competitors for the same customer and still be profitable across the relationship.
What is the difference between LTV and AOV?
AOV is the value of a single order; LTV is the total value of a customer across all their orders over time. LTV captures repeat purchases, AOV does not.
How do I increase customer lifetime value?
Increase repeat purchase rate and AOV: post-purchase email flows, complementary second-product offers, subscriptions, and loyalty incentives all raise LTV from customers you already paid to acquire.
Original content by First Sale Society — . Free, no paywall.