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Customer LTV Calculator — Lifetime Value Tool

Calculate Customer Lifetime Value from ARPU, monthly churn rate, and gross margin. Get gross and net LTV, LTV:CAC ratio with benchmark rating, and a churn sensitivity table showing how LTV changes across different churn rates.

Saas ToolsSaaS Integration & Backend
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How to Use Customer LTV Calculator — Lifetime Value Tool

How to Use the Customer LTV Calculator

Step 1: Enter Your Core Inputs

  • ARPU — Average Revenue Per User per month (total MRR ÷ total customers)
  • Monthly Churn Rate — percentage of customers who cancel each month (e.g. enter 2 for 2%)
  • Gross Margin — your software gross margin as a percentage (typically 65–85% for SaaS)

Step 2: Add CAC for LTV:CAC Analysis (Optional)

Enter your Customer Acquisition Cost to unlock the LTV:CAC ratio card and add a ratio column to the sensitivity table. CAC is typically calculated as total sales and marketing spend divided by new customers acquired in a period.

Step 3: Read the Results

  • Customer Lifetime — average months a customer stays before churning (1 ÷ churn rate)
  • Gross LTV — ARPU × Customer Lifetime (revenue before costs)
  • Net LTV — Gross LTV × Gross Margin (profit contribution per customer)
  • LTV:CAC Ratio — Net LTV ÷ CAC; target ≥ 3x for healthy unit economics

Step 4: Use the Sensitivity Table

The table shows how LTV and LTV:CAC change across churn rates from 0.5% to 15%. Your current rate is highlighted in blue. Use this to quantify the value of reducing churn — each row shows the exact LTV improvement from halving or quartering your churn rate.

Tips

  • Use presets (SMB SaaS, Enterprise SaaS, B2C SaaS) to benchmark against typical scenarios
  • A 3:1 LTV:CAC is the minimum viable threshold; best-in-class companies target 5:1 or higher
  • Gross margin has a linear impact on net LTV — a 10-point margin improvement raises net LTV by ~14% at 70% margin

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