Free calculator
CLV calculator
Customer lifetime value: how much the average customer spends with you over the whole relationship, and how much of that is profit.
Customer lifetime value (CLV)
Margin is optional. If filled in, it adds the profit value to the revenue value.
- CLV in revenue
- — $
- CLV in profit
- — $
What CLV is and how it's calculated
CLV (Customer Lifetime Value) is the value a customer brings over the entire relationship with your company, not from a single purchase:
CLV = average purchase value × purchases per year × relationship length in years
A customer who buys four times a year at 1,500 Kč and stays for five years has a CLV of 1,500 × 4 × 5 = 30,000 Kč in revenue. At a 30 % margin, their value in profit is 9,000 Kč. It's the profit value that caps how much you can afford to spend on winning and keeping them.
What CLV is good for
The first contact with a customer is always the most expensive. Once you know CLV, you stop judging advertising by the first purchase: an acquisition at a CPA of 800 Kč looks expensive on a 1,500 Kč order, but for a customer worth 30,000 Kč it's an excellent deal. CLV thus tells you how much you can afford to invest in acquiring and retaining customers. And why repeat sales pay off more than chasing ever new names.
What to watch out for
- Averages hide differences. A loyal regular and a one-off discount hunter have different CLVs; calculate the value by segment, not across everyone.
- Relationship length is an estimate. Take it from your own data (how long it takes customers to stop buying), not from wishful thinking.
- Revenue-based CLV lies about profitability for low-margin products, which is why the calculator has an optional margin field.
Where to go next
You can do the maths. But what next? How to turn customers who bought once into customers who buy repeatedly is the subject of the book Opakovaný prodej.