Stop guessing your most important growth metric. Calculate your LTV instantly to optimize your ad spend, reduce churn, and scale profitably.
Forecast future revenue based on current customer retention and spend data. Make data-driven decisions.
Know your limit. Calculate your ideal Customer Acquisition Cost (CAC) to ensure you're not burning cash.
See exactly how small improvements in retention can compound your revenue over time.
Understanding the LTV formula is crucial for any business model. While our calculator handles the complex math, here is the basic concept:
LTV = (Average Order Value × Purchase Frequency) × Customer Lifespan
For SaaS businesses, it's slightly different:
LTV = ARPU / Churn Rate
Your LTV should be at least 3x higher than your CAC (Customer Acquisition Cost) for sustainable growth.
A "good" LTV depends on your industry and acquisition costs. However, a general rule of thumb is that your LTV should be at least 3 times your CAC (Customer Acquisition Cost). If it's lower, you're likely spending too much to acquire customers.
Churn rate is the percentage of customers who stop paying you. It is the single biggest destroyer of LTV. Reducing churn by just 5% can increase profitability by 25-95% because it directly extends the customer lifespan.
Yes! Our calculator has modes for both Subscription (SaaS) and Transactional (E-commerce) business models, so you can get accurate data regardless of how you sell.
Aim for an LTV:CAC ratio of 3:1 for healthy growth.