How we calculate this
See methodology- Convert gross margin percentage into a decimal.
- Multiply average revenue per customer by that margin.
- Multiply again by the average customer lifespan in months.
Lifetime Value Calculator
Lifetime Value Calculator
Estimate customer lifetime value from revenue, margin, and lifespan.
Formula
LTV
Average revenue per customer × Gross margin % × Customer lifespan Worked example
If average revenue per customer is $150, gross margin is 70%, and average lifespan is 12 months, here is the result.
- Gross profit per month is $150 × 0.70 = $105.
- Multiply $105 by 12 months.
- Estimated lifetime value is $1,260.00.
Frequently Asked Questions
Why use gross margin in LTV?
Gross margin gives a cleaner estimate of the value left after direct delivery cost, not just raw revenue.
Should customer lifespan be in months or years?
This calculator uses months so the result is consistent with monthly average revenue.
Can gross margin be 100%?
In practice, no. For this tool, gross margin should stay between 0% and 100%.
Methodology and Trust Note
See full methodologyThese tools are designed to make the math visible, keep assumptions clear, and give you a practical planning result you can review quickly.
This calculator is for educational and planning purposes only. It does not replace professional financial, tax, accounting, or business advice.