Customer Lifetime Value Calculator Guide
Customer Lifetime Value (LTV)
LTV estimates the net profit from a customer over their relationship, considering margins, retention, and discounting.
Simplified Model
LTV ≈ ARPU × gross margin × average lifetime
Example
$30/month, 70% margin, 24 months → LTV ≈ 30 × 0.7 × 24 = $504.
FAQs
Discount rate?
Use NPV for long lifetimes.
Cohort analysis?
Improves accuracy over aggregate averages.