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Customer LTV Calculator

What's a customer actually worth to you?

Most operators set ad budgets based on guesswork, not math. This calculator gives you LTV, LTV:CAC ratio, payback period, and a 24-month cohort projection in real time. Then it tells you exactly which lever moves the number most.

3:1
Healthy LTV:CAC floor
<12mo
Target CAC payback
5x
Cost of new vs. retained customer
+5%
Retention lift = +25-95% profit
Estimated Customer Lifetime Value
$0
Net of acquisition cost. Gross-margin adjusted. Based on your current churn.
LTV : CAC Ratio Health Check
0.00 : 1
Burn cash < 1:1 Marginal 1-3:1 Healthy 3:1+
Healthy
SaaS

Sets sensible defaults for the four inputs below.

$150

Monthly revenue per active customer. For transactional businesses, use average order value.

Model default: $150 /mo
80%

Revenue minus cost of delivery. SaaS is usually 70-85%. Service businesses 40-65%.

Model default: 75-85%
4.0%

% of customers that cancel each month. For transactional businesses, repurchase interval drives this.

Model default: 3-6% /mo
$400

Total sales + marketing spend divided by new customers acquired. Include people, tools, ad spend.

Model default: $300-500
8%

Year-over-year ARPU growth from existing customers (upgrades, add-ons, price increases).

Model default: 5-15%
Customer Lifetime
25 mo
Avg months a customer stays active before churning.
CAC Payback
3.3 mo
Months until acquisition cost is recovered from gross margin.
Annual Contract Value
$1,800
ARPU x 12. Useful for annual prepay deal sizing.
Year-1 Margin Per Customer
$1,260
ARPU x margin x 12, net of churn during the year.
24-Month Cohort Retention Projection
Your cohort
Month 24 Active 0%
How You Compare With the Model Defaults
Model default You
LTV Lifetime value per customer
$3,000
LTV : CAC Ratio (higher is better)
3.0x
Payback period Months to recover CAC (lower is better)
5 mo
Monthly churn % lost each month (lower is better)
4.0%
Gross margin % revenue retained after delivery cost
80%
Sensitivity: which lever moves LTV the most?
Modeled against your current inputs
Operator Playbook
1 Cut churn before scaling spend. A 1% drop in monthly churn raises LTV more than a 10% drop in CAC. Always work the retention lever first.
2 Target a CAC payback under 12 months. Above that, you're a cash-flow business pretending to be a growth business. Sub-6 months is best-in-class.
3 Use gross margin, not revenue, when computing LTV. A $100 ARPU at 30% margin is worth less than a $50 ARPU at 80% margin once you factor in fulfillment cost.
4 If LTV:CAC drops below 3:1, stop the channel, not the spend. Find which acquisition channel is dragging the blended ratio down and pause that one specifically.
5 Expansion revenue is free LTV. A 10% annual upsell rate on existing customers compounds harder than a 10% increase in new acquisition. Build the upsell motion before the next ad campaign.

What happens next

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Where revenue quietly disappears: missed calls, slow response, dropped follow-up and no-shows, with a deploy playbook for six industries.

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How this calculator works

What formula is this using?
Two layers. The classic LTV formula is LTV = ARPU x GrossMargin / MonthlyChurn, which gives you a steady-state value. We layer expansion revenue on top by compounding ARPU at the annual expansion rate you provide, then discounting future cash by churn. That gives you a realistic 24-month cohort curve instead of a flat geometric series. CAC payback is CAC / (ARPU x GrossMargin) in months.
Why does the LTV:CAC ratio matter more than raw LTV?
Raw LTV without context is vanity. A $10K LTV that takes $9K to acquire is a charity. The ratio tells you whether the unit economics support reinvestment. 3:1 is the long-standing floor for venture-scale growth. Below 1:1 you're burning cash on every customer. Between 1-3 you're stable but capital inefficient. Above 5:1 you're probably underspending on growth.
Where do the model defaults come from?
Defaults are Nirvani's planning estimates for each industry, not figures from a cited study. Treat them as starting assumptions, not measured medians. Your numbers will vary by region, niche, and channel mix. If your actuals beat the defaults, your actuals are the truth. The defaults only matter for the slider starting points.
Should I use gross margin or contribution margin?
Gross margin is the safer default for LTV math. It captures cost-of-delivery (hosting, fulfillment, merchant fees, support headcount) but excludes fixed overhead. If you want a stricter number, use contribution margin (gross margin minus variable sales costs). Don't use net margin. Net pulls in rent and salaries that won't change with the next customer, which understates LTV.
My business is transactional, not subscription. How do I model churn?
Convert repurchase interval to monthly churn. If your average customer buys once every 8 months, monthly churn is roughly 1 / 8 = 12.5%. For one-time-only purchases (law firm intake, real estate transaction), set churn at 50%+ and treat LTV as "average order value x margin x referral multiplier." Real estate brokerages often see 10-15% of past clients refer one new deal, which is the only LTV they actually have.
Does expansion revenue really matter?
Yes, more than people think. A 10% net expansion rate (after accounting for downgrades) on a customer base with 4% monthly churn flips the geometric series from decay to growth. The cohort actually generates more revenue in year two than year one. This is how SaaS businesses with "high churn" still print money, and it's the single most under-modeled lever in operator LTV math.
What's in the detailed PDF report?
Five pages: (1) Your numbers, with sensitivity table and 24-month cohort curve. (2) The model defaults for your industry, side by side with your inputs. (3) The three retention levers most likely to move your ratio (specific to your inputs). (4) A pricing-and-packaging audit checklist. (5) Implementation roadmap, week 1 through day 90. No marketing fluff. We'll email it after you submit. Delivery time can vary. the form.