Mode 1 — Base CLTV
Formula: average purchase value × purchases per year × customer lifespan (years).
Mode 2 — Margin-Based CLTV
Like the base mode, multiplied by gross margin % — more accurate because it reflects profit, not just revenue.
Mode 3 — CLTV vs CAC
Compare customer lifetime value with customer acquisition cost (CAC). A 3:1 LTV:CAC ratio is the general rule of thumb for a healthy business.
Mode 4 — 2-Segment Comparator
Compare the margin-based CLTV of two customer segments side by side.
Segment A
Segment B
| Metric | Segment A | Segment B |
|---|---|---|
| Margin-based CLTV | — | — |
| Difference | — | |
| Winning segment | — | |
How to calculate CLTV
Margin CLTV = base CLTV × gross margin %
LTV:CAC ratio = CLTV ÷ CAC
Example
A customer spending an average of Rp500,000 four times a year for 3 years has a base CLTV of Rp6,000,000. With a 60% gross margin, the margin-based CLTV becomes Rp3,600,000. If the customer acquisition cost (CAC) is Rp1,000,000, the LTV:CAC ratio is 3.6:1 — meeting the general 3:1 rule of thumb.
Frequently asked questions (FAQ)
What is CLTV (Customer Lifetime Value)?
CLTV (Customer Lifetime Value) is an estimate of the total value one customer generates while they remain your customer. The base formula: average purchase value × purchases per year × customer lifespan in years. Example: a customer spending an average of Rp500,000 four times a year for 3 years has a CLTV of Rp6,000,000.
How do I calculate CLTV accounting for profit margin?
Multiply the base CLTV by the gross margin percentage: CLTV = average purchase value × purchases per year × customer lifespan × gross margin %. Example: a base CLTV of Rp6,000,000 with a 60% gross margin gives a margin-based CLTV of Rp3,600,000. The margin-based version is more accurate because it reflects profit, not just revenue.
What is the ideal LTV:CAC ratio?
As a general rule of thumb, a 3:1 LTV:CAC ratio is considered healthy — meaning customer lifetime value is three times the cost of acquiring the customer. A ratio of 5:1 or more is very healthy, while below 1:1 is unsustainable because acquisition cost exceeds customer value. Example: a CLTV of Rp3,600,000 with a CAC of Rp1,000,000 gives a ratio of 3.6:1.
Is this CLTV the same as CLTV in mortgages (Combined Loan-to-Value)?
No. The CLTV in this calculator is Customer Lifetime Value — a marketing metric for measuring customer lifetime value. Combined Loan-to-Value is a mortgage term measuring total loans against property value. The two just happen to share the same abbreviation.
What data do I need to calculate CLTV?
Three basic data points: (1) average purchase value per transaction, (2) purchase frequency per year, and (3) average customer lifespan in years. For margin-based results, add (4) the gross margin percentage. For LTV:CAC analysis, add (5) customer acquisition cost (CAC).