Free customer lifetime value (CLV) calculator

Everything you need to know about the customer lifetime value calculation

What is the customer lifetime value (CLV)?

Customer lifetime value (CLV) is a crucial business metric that represents the total average revenue you can expect to earn from a single customer throughout their entire relationship with your business. It reflects the value a customer brings to your company, from their first purchase to their last interaction.

A high CLV indicates that your customers are consistently contributing significant value to your business, which is a strong indicator of long-term profitability and growth. By increasing CLV through improved retention, loyalty, and engagement strategies, businesses can achieve sustainable success while maximizing revenue from their existing customer base.

Understanding CLV not only helps you evaluate your current business health but also enables you to implement targeted strategies to enhance customer relationships, reduce churn, and grow revenue over time.

How to calculate customer lifetime value?

Our CLV calculator gives you an accurate estimation of your average customer’s total lifetime value by using simple inputs like number of customers, MRR (monthly recurring revenue), ARPA (average revenue per account), gross margin, and churn rate.

Steps to calculate CLV

Enter the total number of paying customer accounts you currently serve.
Enter your total monthly recurring revenue (MRR). This is the combined revenue you earn every month from your customers.
Your average revenue per account (ARPA) will be calculated automatically upon entering the total number of paying customers and monthly recurring revenue (MRR). This is the average revenue you earn per subscription account per month.
Add your gross margin. Your gross margin percentage reflects the portion of revenue retained as profit.
Enter your churn rate. The churn rate is the percentage of customers who stop using your service monthly.

Click calculate to instantly find out your customer's lifetime value.

CLV formula to calculate manually

The calculator uses the following formula to determine your CLV:

CLV = ARPA * Gross margin (%)
Churn rate (%)

Where:

ARPA: Average revenue per account per month
Gross margin: The percentage of revenue retained as profit
Churn rate: The percentage of customers lost per month

For example

ARPA: $25
Gross margin: 85% (0.85)
Churn rate: 10% (0.10)

CLV = 25 * 0.85
0.10 = 212.50

The calculated customer lifetime value (CLV) is $212.50, meaning each customer contributes this amount in profit throughout their business relationship.

Why use Usermaven’s CLV calculator?

Usermaven’s CLV calculator simplifies customer lifetime value calculations by providing accurate results quickly and effortlessly. This free, user-friendly tool eliminates manual formulas, delivers actionable insights for better decision-making, and helps businesses focus on growth by identifying their most valuable customers. Here’s why you should use Usermaven’s CLV calculator:

Simple and free

Usermaven’s CLV calculator is a completely free, easy-to-use tool designed to help you determine your customers' lifetime value quickly and effortlessly. There’s no need for manual calculations or complicated formulas, simply input your data, and the calculator handles the rest.

Accurate insights for smarter decision-making

Our CLV calculator provides precise results to help you better understand your customers' long-term value. These insights allow you to make data-backed decisions, improve customer retention strategies, and forecast future revenue with confidence.

Growth-focused and actionable results

By identifying your most valuable customers, you can tailor your marketing and sales strategies to focus on nurturing high-value relationships. Whether you’re planning for short-term goals or long-term growth, Usermaven’s CLV calculator equips you with the knowledge you need to drive business success.

Why calculate customer lifetime value?

Understanding your customer lifetime value (CLV) is essential for assessing the overall health of your business, identifying growth opportunities, and making data-driven strategic decisions. By knowing the revenue you can expect to earn from a single customer over their entire lifecycle, you gain valuable insights into how well your business is performing and how to improve profitability in the long run.

Better budget planning

By calculating your CLV, you can optimize how you allocate your marketing and advertising budgets. Instead of spending resources blindly, focus on acquiring high-value customers who are likely to generate long-term revenue and deliver the best return on investment (ROI).

Reduce customer acquisition costs (CAC)

Understanding which customer segments or marketing channels bring in the most valuable customers allows you to optimize your acquisition strategy. By identifying the most profitable channels, you can reduce your CAC while attracting customers who deliver more value over time.

Track customer retention

Retaining customers is often more cost-effective than acquiring new ones. Calculating CLV helps you analyze your current retention strategies and identify areas for improvement. By reducing customer churn and increasing retention, you enhance long-term profitability and customer loyalty.

Grow revenue with actionable insights

CLV insights empower you to implement strategies that boost your revenue, such as increasing the frequency of purchases, encouraging upsells and cross-sells, and fostering stronger customer loyalty. By focusing on customers who bring the most value, you can unlock new opportunities for consistent business growth.

With Usermaven’s CLV calculator, you gain clear and actionable insights that enable you to improve profitability, refine your business strategy, and make smarter decisions for sustainable success.

Tips to increase customer lifetime value (CLV)

Improving your CLV requires targeted strategies that focus on customer retention, increasing spending, and optimizing overall satisfaction. Here are actionable tips to help businesses boost their customer lifetime value:

Enhance customer experience

Providing an outstanding customer experience is one of the most effective ways to increase CLV. Focus on delivering superior product quality, intuitive usability, and seamless interactions across all touchpoints. Customers who enjoy a positive experience are more likely to stay loyal and make repeat purchases.

Cross-sell and upsell

Identify opportunities to recommend additional products or upgrades that align with your customers' needs. Cross-selling complementary products or upselling premium plans can increase the average order value (AOV) and encourage customers to spend more over time.

Personalize communication

Tailored communication helps build deeper relationships with customers. Use customer data to send personalized emails, targeted offers, or product recommendations based on individual behaviors and preferences. This makes customers feel valued and incentivizes repeat business.

Focus on retention

Acquiring new customers is expensive; retaining existing ones is more cost-effective and rewarding. Implement loyalty programs, reward frequent customers, and offer exclusive deals to encourage repeat purchases and long-term commitment.

Reduce churn

Analyzing and addressing the reasons for customer churn is critical for improving CLV. Regularly gather feedback, monitor customer behavior, and proactively resolve issues to retain at-risk customers. Lowering churn ensures customers stay with your business longer, contributing to higher lifetime value.