Customer Lifetime Value (LTV) Calculator
LTV tells you how much revenue a customer generates over their entire relationship with your business. It's the single most important metric for subscription unit economics.
Customer Lifetime Value
$700
Avg Customer Lifetime
20.0 months
Formula:
LTV = (ARPU × Gross Margin) / Monthly Churn Rate
Avg Lifetime = 1 / Monthly Churn Rate
What's a Good LTV?
LTV benchmarks vary significantly by business model, price point, and market. Here are typical ranges for SaaS and subscription businesses:
SMB SaaS
$1,000–$5,000
Higher churn, lower ARPU
Mid-Market SaaS
$10,000–$50,000
Lower churn, higher ARPU
Enterprise SaaS
$100,000+
Multi-year contracts, very low churn
How LTV Is Calculated
ARPU (Average Revenue Per User) is your monthly revenue per customer. Gross Margin removes the cost of delivering your service. Dividing by Monthly Churn Rate accounts for how long customers stick around on average.
This formula assumes constant churn — in reality, churn often decreases over time as less-engaged customers leave first. For a more conservative estimate, use your observed churn from the last 12 months rather than a single recent month.
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