Free Customer Lifetime Value (CLTV) Calculator

What is customer lifetime value (CLV)

Customer lifetime value (CLV) shows how much revenue a single customer brings to your business over the entire time they stay with you.

This metric is essential for predicting long-term business growth. It helps you understand how much you can invest in acquiring new customers and retaining existing ones—without hurting your profit margins.

How do you calculate CLV?

Calculating customer lifetime value is simple. Follow these steps:

Step 1: Find your average order value

This is how much a typical customer spends per purchase.
Example: If your average sale is ₹2,000, then your average order value is ₹2,000.

Step 2: Calculate purchase frequency per year

This is how often a customer buys from you in a year.
Example: If customers buy every two months, that’s 6 purchases a year.

Step 3: Estimate customer lifespan

This is the average number of years a customer stays with your business.
Example: If most customers stay for 3 years, your customer lifespan is 3.

Final calculation

Multiply the three numbers using the CLV formula:
CLV = Average order value × Purchase frequency × Customer lifespan

Example: ₹2,000 × 6 × 3 = ₹36,000
This means each customer brings ₹36,000 in revenue over their lifetime.

CLV calculation formula

CLV = Average order value × Purchase frequency × Customer lifespan

This formula gives a quick and reliable way to estimate long-term customer revenue. It helps businesses set realistic marketing budgets, forecast growth, and improve customer strategies.

Example of CPM calculation

Let’s say you ran a Facebook ad campaign and spent ₹5,000. Your ad received 200,000 impressions.

Now plug the numbers into the CPM formula:

CPM = (5,000 ÷ 200,000) × 1,000
 CPM = 0.025 × 1,000 = ₹25

That means you paid ₹25 for every 1,000 impressions. If your goal was brand awareness or exposure, this is the number that tells you how efficiently you achieved it.

Why calculating CLV is important

It helps you understand the real value of each customer

CLV reveals how much revenue one customer can bring in over time. This helps you focus on long-term customer relationships rather than just individual sales.

It guides your marketing and sales budget

Knowing your CLV helps you set a profitable customer acquisition cost. If a customer brings in ₹30,000 over time, spending ₹3,000 to acquire them is a smart move.

It shifts focus to retention and repeat business

CLV encourages businesses to prioritize customer experience, loyalty, and satisfaction—because keeping a customer is often more profitable than acquiring a new one.

It helps you segment high-value customers

You can identify your most valuable customers and tailor campaigns, offers, and communication to keep them engaged and buying more often.

It supports better forecasting and growth planning

CLV helps you make more accurate revenue predictions and long-term plans. This is especially useful for businesses with recurring revenue, like SaaS and eCommerce.

Improve your CLV with Tenet

At Tenet, we help you increase customer lifetime value by optimizing how customers interact, purchase, and stay loyal to your brand.

Our services that directly impact CLV include:

• Growth marketing – run campaigns that drive repeat purchases
• Email and retention marketing – automate follow-ups and loyalty programs
• Conversion optimization – improve the user journey to boost repeat orders
• Brand strategy – create stronger customer connections through clear messaging
• User journey design – guide customers from first click to long-term loyalty

👉 Contact our experts and get a free proposal