Customer Lifetime Value Calculator — CLV & LTV:CAC | Blackridge Research

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Customer Lifetime Value Calculator

Compute CLV from revenue, margin, and churn — and the LTV:CAC ratio that governs growth spend.

Free · No signup · By the analysts at Blackridge Research · Updated 2026-07-18

Inputs

Results

What this means

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Adjust the inputs to calculate.

About the Customer Lifetime Value Calculator

Customer Lifetime Value (CLV) is the total profit a customer generates over their entire relationship with your business.

It is the foundation of customer acquisition economics and the LTV:CAC ratio that governs growth spend.

Formula

            CLV = (ARR × Margin) / Churn Rate | LTV:CAC = CLV / CAC
ARR
— Average Revenue per Customer — annual revenue per customer
Margin
— Gross Margin — gross profit as percentage of revenue
Churn
— Churn Rate — annual customer churn as decimal
CAC
— Customer Acquisition Cost — cost to acquire a new customer

How to use this calculator

  1. 1

    Enter average revenue per customer

    Input the average annual revenue per customer.

  2. 2

    Enter gross margin percentage

    Input the gross margin as a percentage.

  3. 3

    Enter annual churn rate

    Input the percentage of customers lost per year.

  4. 4

    Enter customer acquisition cost

    Optionally, input CAC to see LTV:CAC ratio.

Example calculations

SaaS CLV calculation

A SaaS company has average revenue of $10,000 per customer, 70% gross margin, and 10% annual churn. CAC is $15,000.

CLV = ($10,000 × 70%) / 10% = $70,000. LTV:CAC = $70,000 / $15,000 = 4.7×.

CLV:
$70,000
LTV:CAC Ratio:
4.7×

At 4.7× LTV:CAC, the company has a healthy customer acquisition model.

Interpreting your results

A healthy LTV:CAC ratio is 3:1 or higher. If LTV:CAC is below 3:1, the business model needs review.

CLV increases with higher revenue, higher margin, and lower churn. The most powerful lever is usually reducing churn.

Need the market data behind this calculator?

The Customer Lifetime Value Calculator is only as good as its inputs. Blackridge Research publishes syndicated market reports with vetted market sizes, growth rates, and competitive landscapes across 40+ industries — and builds custom studies when the shelf report doesn't exist.

Download a Sample Report Request Custom Research

Industry applications

Business

  • Customer acquisition strategy: determine how much you can spend to acquire a customer.
  • Pricing decisions: understand the long-term value of different customer segments.
  • Investor relations: LTV:CAC is a standard metric for subscription businesses.

Construction

  • Equipment lessors calculate CLV for long-term equipment rental customers.
  • Material suppliers calculate CLV for contractor relationships.
  • Construction companies calculate CLV for repeat clients.

Research

  • Market research firms calculate CLV for customer segmentation.
  • Analysts use CLV to assess business model quality and sustainability.

Common mistakes to avoid

  • ✗ Using revenue instead of profit

    CLV should use gross margin not revenue. Using revenue overstates customer value.

  • ✗ Ignoring customer acquisition cost

    LTV:CAC is the key metric — without CAC, CLV alone doesn't tell you if the unit economics work.

Frequently asked questions

›What is a good LTV:CAC ratio?

3:1 or higher is considered healthy. Below 3:1, the business model needs review.

›How do I reduce churn to increase CLV?

Focus on customer success, product quality, onboarding, and regular engagement.

Glossary

CLV:
Customer Lifetime Value — the total profit a customer generates over their relationship.
LTV:CAC:
Lifetime Value to Customer Acquisition Cost ratio — the efficiency of customer acquisition.
Churn rate:
The percentage of customers lost per period.
Gross margin:
Revenue minus cost of goods sold, expressed as a percentage.

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