Customer lifetime value (LTV) calculator.
Enter AOV, margin, orders per year, lifespan. Get contribution-margin LTV — the number that decides how much you can pay to acquire a customer.
Per customer
Defaults assume a Shopify boutique with returning customers.
Customer LTV
LTV is the number that justifies your ad spend.
Customer lifetime value (LTV) is the total contribution margin you'll earn from one customer over their entire relationship with your business. It's the ceiling on what you can profitably pay to acquire them.
The formula
Per order = AOV × gross margin %Yearly = per order × orders per yearLTV = yearly × customer lifespan years
Why "contribution margin" matters
Most LTV calculators use revenue — that's the lie. Revenue isn't yours to spend; only the margin after COGS, shipping, and processing fees is. Use the right number or you'll overspend on ads chasing customers who don't pay back.
The 3:1 rule for LTV:CAC
The healthy ratio of lifetime value to customer acquisition cost is 3:1. If your LTV is €312, your maximum CAC is €104. Above that and customer growth makes you poorer. The ratio leaves room for the overhead, the customers who don't convert, and the lifespan being shorter than you hope.
What kills LTV (and what to do)
One-time buyers (drives lifespan to 0.5 years) → focus on repeat-purchase mechanics: subscriptions, replenishment reminders, loyalty tiers, post-purchase email flows. Low AOV → bundle, free-shipping thresholds, upsells. Low margin → renegotiate suppliers, raise prices, or drop the low-margin SKUs.