LTV Calculator

Calculate Customer Lifetime Value (LTV) to determine the total revenue you can expect from a single customer account.

Calculator

Average Revenue Per User (ARPU)

The average monthly revenue generated per customer.

Monthly Churn Rate

The percentage of customers who cancel their subscription each month.

CUSTOMER LIFETIME VALUE

$2,500.00

Healthy

Solid LTV for most mid-market SaaS companies.

Formula

LTV = ARPU ÷ Monthly Churn Rate

Worked example

If your average customer pays $100/month and your monthly churn rate is 5%, your LTV would be: LTV = $100 ÷ 0.05 = $2,000 This means the average customer is worth $2,000 to your business over their lifetime.

Average Revenue Per User (ARPU): 100
Monthly Churn Rate: 5

Industry benchmarks

Low

Low lifetime value. Focus on increasing retention or upselling.

Healthy

Solid LTV for most mid-market SaaS companies.

High

Strong unit economics. Significant room for high-cost acquisition.

FAQ & key takeaways

How to read this metric

What it measures

Customer Lifetime Value (LTV) is the total amount of money a customer is expected to spend with your business during their entire relationship with you. In SaaS, it is primarily driven by your Average Revenue Per User (ARPU) and your Churn Rate.

Why it matters

LTV is the “North Star” metric for unit economics. It tells you how much you can afford to spend to acquire a customer (CAC). A common rule of thumb is that LTV should be at least 3x your CAC for a healthy, sustainable business.

How to increase LTV

Reduce Churn: Improve your product and customer success to keep customers subscribed longer.
Upsell and Cross-sell: Offer higher tiers or additional products to existing customers to increase ARPU.
Annual Billing: Encourage users to pay annually to lock in revenue and reduce short-term churn.
Improve Onboarding: Ensure new users find value quickly so they are less likely to cancel in the first few months.