How it works
How to calculate customer lifetime value
Enter purchase behavior
How much does a typical customer spend per order, and how many times do they buy per year? Use your real averages from the last 12 months.
Add lifespan and margin
How many years does the average customer stay active? And what is your profit margin after costs? These two numbers determine whether CLV is exciting or sobering.
See what each customer is worth
The calculator shows annual customer value and total CLV. Compare it to your CAC to see if your acquisition spend makes sense.
How to increase customer lifetime value
Three ways to grow CLV: get customers to buy more often, spend more per order, or stick around longer.
Increase purchase frequency
Email reminders, restock notifications, and loyalty programs bring customers back sooner. Going from 3 to 4 purchases per year increases annual value by 33%.
Raise average order value
Bundles, cross-sells, and free shipping thresholds push people to spend more per order. A $10 AOV increase across 4 annual purchases adds $40 per year per customer.
Extend customer lifespan
Better onboarding, proactive support, and loyalty rewards keep customers active longer. One extra year of a $340 annual customer is $340 in additional CLV.
Collect reviews to build loyalty
Customers who leave reviews are more engaged and more likely to buy again. The act of writing a review creates a psychological commitment to your brand that reduces churn.
Improve margins without raising prices
Negotiate better supplier rates, reduce packaging costs, or cut shipping expenses. Every margin point increases CLV across your entire customer base.
Segment and focus on high-CLV customers
Not all customers are equal. Identify your highest-value segment and double down on acquiring more people like them. One $500 CLV customer is worth five $100 CLV customers.
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Questions, answered
The total profit a customer generates over their entire relationship with your business. If a customer spends $85 per order, buys 4 times a year, stays for 3 years, and your margin is 25%, their CLV is $255. It tells you what a customer is actually worth, not just what they spent today.
Average Purchase Value x Purchase Frequency x Customer Lifespan x Profit Margin. So $85 x 4 x 3 x 0.25 = $255. Simple multiplication, but each input needs to come from real data.
Because revenue is not profit. A customer who spends $1,000 at 10% margin is worth $100 to you. A customer who spends $500 at 40% margin is worth $200. Without margin, CLV is just a revenue number that overstates what you actually earn.
3:1 is the standard benchmark -- each customer should generate 3 times what it cost to acquire them. Below 2:1 means acquisition is too expensive. Above 5:1 could mean you are not investing enough in growth.
Look at your customer data. When did customers first buy, and when did they stop? The average gap is your lifespan. If you do not have the data, a rough estimate works for now -- you can refine it later.
Yes, but the lifespan input matters more. If most customers only buy once, your lifespan is effectively 1 year and your frequency is 1. Your CLV will be lower, which means your CAC budget is tighter.
Customers who leave reviews buy more often and stay longer. The act of reviewing creates engagement and commitment. Stores that actively collect reviews typically see higher repeat purchase rates, which directly increases CLV.
Quarterly works well. Purchase patterns change, margins shift, and lifespan estimates improve as you get more data. Recalculating keeps your acquisition budget anchored to reality.
Increase CLV with reviews that build loyalty
Customers who engage with your brand through reviews buy more often and stick around longer. WiserReview makes that engagement automatic.
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