Customer lifetime value
Estimate customer lifetime value two ways — the simple AOV × frequency × lifespan formula and a margin-and-churn version — with LTV:CAC, affordable CAC, payback periods and a retention-curve split.
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Customer and cost inputs
Money is computed in integer cents and the retention-curve split uses the largest remainder method (the periods sum to exactly the LTV); ratios are shown rounded to 2 decimals.
LTV result
900.00360.0030.002,700.00600.0020.00 periods4.00×200.005 periods65.27600.00What this tool does
- Decide whether you can afford more acquisition: a 300 yuan average order bought 3 times a year at a 5% monthly churn and a 40% margin gives an LTV of 600 yuan, so a 150 yuan CAC is a 4.00× LTV:CAC — above the usual 3:1 line, with room to scale.
- Compare the two views: the simple formula (AOV × frequency × lifespan) gives a 2,700 yuan revenue-based LTV, while the margin-and-churn version gives 600 yuan — the gap is exactly the difference between revenue and profit.
- Set a CAC ceiling: with a target ratio of 3, the affordable acquisition cost is 200 yuan. Once your real CPA passes that, tighten the campaigns instead of scaling them.
- Read the payback rhythm: at 30 yuan of profit per period and a 150 yuan CAC, payback takes 5 periods. Together with the retention split, that shows which periods carry the cash-flow pressure.
Example
Input
Average order 300 yuan, 3 purchases per year, 3-year lifespan, 5% churn per month, 40% gross margin, 150 yuan CAC, 12 periods per year, 12 periods to split over, target LTV:CAC 3
Output
Annual revenue 900.00 yuan, annual gross profit 360.00 yuan, profit per period 30.00 yuan, simple LTV 2,700.00 yuan, LTV with margin and churn 600.00 yuan, average life 20.00 periods, LTV:CAC 4.00×, affordable CAC 200.00 yuan, payback 5 periods, first-period profit 65.27 yuan (the 12 periods sum to 600.00 yuan)
The margin-and-churn LTV is profit per period 30.00 yuan ÷ 5% monthly churn = 600.00 yuan; the retention split gives 65.27 yuan in the first period down to 37.12 in the last, summing to exactly 600.00 yuan.
Frequently asked questions
Why do the two LTVs differ so much (2,700 vs 600 yuan)?
The simple formula is revenue-based: 300 × 3 × 3 = 2,700 yuan. The margin-and-churn version only counts profit you actually keep and discounts the life by churn: 30 yuan per period ÷ 5% monthly churn = 600 yuan. Use the first to compare scale with peers and the second to judge whether acquisition pays.
Should churn be entered per month or per year?
Match the period set by "periods per year": 12 means monthly, so enter the monthly churn rate; set it to 1 for an annual rate. LTV is profit per period ÷ churn per period, so the answer is the same as long as both use the same period.
How does the retention split work, and why is it below the per-period profit?
Period k is weighted by (1 − churn)^(k−1) — the probability the customer is still around. Customers drop off, so later periods carry less profit: 65.27 yuan in the first period down to 37.12 in the twelfth, with the largest remainder method keeping the total exactly equal to the LTV.
What LTV:CAC is healthy?
The common rule of thumb is about 3:1, and anything below 1 usually means you lose money on acquisition. But it depends on margin and speed: with a 5-period payback and tight cash flow, even a healthy ratio can be uncomfortable. The target ratio in the tool is editable.
How are amounts and percentages rounded?
Money stays in integer cents and annual revenue, annual gross profit and profit per period are each rounded once. The retention split uses the largest remainder method, so the periods sum to exactly the LTV. Ratios keep their exact value internally and are rounded to 2 decimals for display; payback periods round up.
Keywords：ltvcustomer lifetime valueltv cac ratiochurn rateretention客户终身价值LTV计算流失率获客成本留存曲线