Lifetime Value Calculator
LTV shows how much money a customer brings throughout the entire cooperation period. The GuildOfMarketing interface is enhanced with explanations about retention and margin.
Unit Economics Parameters
Other GuildOfMarketing Calculators
Complete your financial model by combining LTV with other GuildOfMarketing metrics.
Formula
LTV = AOV × Purchase frequency × Customer lifetime × Margin × (Retention / 100)
We multiply by retention to account for loyalty and churn. If retention is 65%, then 35% of customers do not return and do not affect long-term revenue.
Why this metric is useful
- Compare CPO with LTV and average margin.
- Identify channels where CPO exceeds margin — they need optimization.
- Use the data in the ROMI calculator to evaluate profitability.
Extended explanations
Plan LTV over a horizon of 12–24 months. Fix the average order value in local currency, the repeat purchase rate, churn rate, and margin. Add customer support costs: success team, tech support, and loyalty programs. This gives you real customer value, not abstract revenue.
Use three scenarios: baseline, optimistic, and pessimistic. In the pessimistic scenario, reduce retention by 10–15 pp and see how it affects CAC payback. If LTV/CAC < 2, you need to launch loyalty or onboarding programs to stabilize the situation.
- Compare LTV across customer segments (SMB, Mid, Enterprise).
- Add cross-sell/upsell coefficients if they are stable.
- Agree on a minimum acceptable LTV/CAC ratio with the finance team.
F A Q
We answer the most common questions
What if we have no historical data?
Use forecasts based on AOV and expected purchase frequency. Update the data quarterly to make LTV more accurate.
How to link LTV with ROMI?
ROMI shows the effectiveness of a specific campaign, while LTV reflects long-term customer value. Combine these metrics to plan budgets for retention and automation.
Extended Section: Lifetime Customer Value Calculator
The GuildOfMarketing LTV calculator combines AOV, purchase frequency, margin, retention, and CAC to show a customer’s real financial potential. This value is helpful for marketers, product managers, and financial directors planning growth.
Why calculate Lifetime Value regularly
- To define acceptable CAC and avoid overpaying for traffic.
- To evaluate the effectiveness of loyalty programs, upsells, and cross-sales.
- To segment customers (SMB, Mid, Enterprise) and adapt offers.
How to use the data in practice
Store LTV results in CRM or Google Sheets together with ROMI, CPO, and unit economics. Add notes about the market, seasonality, and product changes — this helps GuildOfMarketing track the reasons behind metric fluctuations. If LTV/CAC drops below 2, launch retention initiatives, personalized service, and educational programs to restore profitability.
