Customer Lifetime Value Calculator
Customer Lifetime Value
Simple CLTV
0
Discounted CLTV
0
Annual Value
0
Predicted Retention
0%
Understanding Customer Lifetime Value
What is Customer Lifetime Value?
CLTV predicts the total value a business can expect from a single customer account throughout their relationship. It helps businesses make informed decisions about acquisition costs, marketing, and customer service investments.
Why CLTV Matters
Companies with higher CLTV can spend more to acquire customers while maintaining profitability. It’s more cost-effective to retain existing customers than acquire new ones – increasing retention by 5% can increase profits by 25-95%.
Key Features of Our CLTV Calculator
Multiple Calculation Methods
Calculates both simple and discounted CLTV to account for future value and inflation.
Retention Analysis
Factors in customer retention rates for more accurate long-term predictions.
Visual Projections
Shows value trends over time to help forecast future revenue streams.
Frequently Asked Questions
What’s the difference between simple and discounted CLTV?
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Simple CLTV calculates raw future value, while discounted CLTV accounts for the time value of money – future earnings are worth less than current earnings due to inflation and opportunity costs.
How often should I recalculate CLTV?
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Recalculate quarterly or whenever your customer behavior changes significantly (new product lines, pricing changes, market shifts). Seasonal businesses should calculate for different periods.
What’s a good discount rate to use?
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Typical discount rates range from 8-15%. Use your company’s weighted average cost of capital (WACC) or industry benchmarks. Higher risk businesses use higher rates.
How can I improve my CLTV?
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Increase purchase frequency with loyalty programs, raise average order value through upselling, improve retention with better service, and extend customer lifespan through engagement strategies.