Customer Lifetime Value Calculator by Selzy
Calculate your customer lifetime value with this free CLV calculator.
![What is CLV](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/what-is-CLV.png)
What is Customer Lifetime Value
How to use our customer acquisition cost calculator
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-1.png)
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-2.png)
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-3.png)
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-4.png)
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-1.png)
Average Purchase Value
Provide the average check per customer for your business. You can get this figure from Google Analytics.
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-2.png)
Average number of orders
Include the average number of orders your customers place per month. You can also find this in Google Analytics.
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-3.png)
Average profit margins
Enter the margin for your business, which is the percentage difference between the purchase or production price and the retail price of your products. For example, if you spend $3 to make a croissant and sell it for $6, your margin is 50%. You can enter 1% if you haven't calculated your margin yet.
![Selzy](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/step-4.png)
Retention time
Type in the average lifetime of the relationship between a new customer and your brand.
The formula used by our LTV calculator
Why is it important to calculate customer lifetime value
It Affects Your Revenue
It may sound obvious, but your overall revenue stream depends on the amount, number, and regularity of each purchase your customers make. The longer they stay with your brand, the more monetary value they bring. Using CLV, you can calculate online in advance the potential revenue you will earn in the future over a given period of time.
It can boost customer loyalty and retention
For your business, CLV means the quality of relationships with your customers. But for your clients, it literally means the quality of your brand. If they stay with you after their first purchase and become repeat buyers, that means your company values really resonate with them — and as a bonus to increasing the average check, you get free advocates for your brand.
It helps you target your perfect customers
How do you determine which acquisition channel is most effective? If your answer is "by the number of leads it brings in," you're wrong! You can get hundreds of new leads who would never buy from you, or who would make a one-time purchase and churn. It's only CLV that shows the true value of each channel by providing a better understanding of the quality of the leads you're getting.
It reduces customer acquisition costs
Customer Acquisition Cost (CAC) helps your business calculate the amount of money spent on attracting a new client. Now, think about what insight you can get from the combination (and correlation!) of CAC and CLTV? Right, it indicates that if your acquisition expenses exceed the average value of a customer, you can't afford that increase of your social media or email marketing budget — and need to reduce your CAC before your business becomes unprofitable.
How to improve your CLV
![What is CLV](https://selzy.com/wp-content/themes/Selzy/templates/selzy-tools-calc/img/how-to-improve.png)
Onboard, nurture, and educate your leads from day one, and make sure you pay enough attention to retention.
For your business to prosper, It’s a must to calculate your customer lifetime value (CLV) as it’s one of the key tools that can help you gauge the effectiveness of your sales and marketing strategy. But lifetime value (LTV) alone doesn't tell the whole story, so it’s recommended to use the calculator for other critical rates such as ROI and CAC as well.