Customer Lifetime Value (LTV) Calculator
Turn repeat purchases into the maximum you can afford to spend acquiring a customer.
Lifetime value (LTV) is the contribution margin a customer generates across all their orders, not their total spend. At about $47 of contribution per order and 2.5 expected orders, LTV is roughly $118 — so at a 3:1 target LTV:CAC you can spend up to about $39 to acquire a customer. Enter your economics and repeat rate to see your max CAC.
These calculators are for planning and estimation, not accounting or financial advice. Verify against your actual platform, payment-processor, and bookkeeping figures before making budget or pricing decisions.
Lifetime contribution (LTV)
$122.58
Contribution margin across 2.5 expected orders.
About the LTV Calculator
Lifetime value is the most misused number in ecommerce, because most people compute it from revenue when the figure that matters is contribution margin. What a customer is truly worth is the profit contribution they leave behind across every order they place — one order's contribution margin multiplied by how many times they'll buy. That distinction changes what you can afford to spend acquiring them. If you only ever profit on the first order, your ceiling on customer acquisition cost is a single order's contribution. If customers genuinely reorder, that ceiling rises to the lifetime contribution, and you can outbid competitors who only look at the first purchase. The discipline is the LTV:CAC ratio: a common healthy target is 3:1, meaning lifetime value should be at least three times acquisition cost, which leaves room for overhead and profit after the ad bill. This calculator turns your unit economics and expected order count into three ceilings — max CAC on the first order alone, max CAC at lifetime break-even, and max CAC at your target ratio — plus the lifetime-adjusted break-even ROAS. One warning worth taking seriously: only budget against lifetime value if your repeat rate is measured from real cohort data, not assumed. Spending first-order money you only hope to earn back is how stores run out of cash while looking profitable on a spreadsheet.
Frequently asked questions
How is customer lifetime value calculated?+
LTV here is contribution margin per order multiplied by expected lifetime orders. Using contribution margin (not revenue or gross margin) means the figure reflects actual profit, so it's safe to set acquisition budgets against.
What is a good LTV:CAC ratio?+
A widely used target is 3:1 — lifetime value at least three times acquisition cost. Much lower and there's little room for overhead and profit; much higher can mean you're underinvesting in growth. Adjust to your margins and payback period.
What's the difference between max CAC on the first order and lifetime?+
First-order max CAC is a single order's contribution margin — the most you can pay if a customer never returns. Lifetime max CAC is that contribution times expected orders — the most you can pay if they do return. The gap is your repeat-purchase advantage.
Should I set ad budgets on lifetime value or first-order value?+
Only use lifetime value if your repeat rate is proven from real cohorts. If it's assumed, budget to first-order economics — otherwise you spend cash now against profit that may never arrive.
By D.J. Gelner
D.J. Gelner is a direct-response marketer with 12+ years running growth for DTC and supplement brands, including VP-level roles. A former attorney, he builds and verifies the unit-economics math behind paid-media decisions daily.