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Free LTV Calculator

Calculate customer lifetime value across cohorts, repeat-purchase patterns, and subscription models — built for DTC and Shopify brands.

Use this free LTV calculator to model customer lifetime value, payback periods, and the LTV:CAC ratio that determines profitable scaling. Built for DTC, Shopify, and subscription brands.

✓ Free to use ✓ No signup ✓ Built for DTC brands ✓ Updates in real time

⚙️ Your Numbers

Average Order Value (AOV)

Average revenue per order

Purchase Frequency (per year)

Average number of orders per customer per year

orders/yr

Average Customer Lifespan

How many years a customer stays active

years

Gross Margin %

Revenue minus COGS as a percentage

Customer Acquisition Cost (CAC)

Total cost to acquire one customer (optional — for LTV:CAC ratio)

Annual Discount Rate

Time value of money — typically 10% for eCommerce (optional)

📊 Your Results

Customer Lifetime Value (Revenue)

$562.50

total revenue per customer over their lifetime

Gross Profit LTV

$337.50

Discounted LTV

$480.21

LTV:CAC Ratio

5.2x

Max Affordable CPA

$112.50

Annual Customer Value

$225.00

CAC Payback (months)

3.5

Lifetime Value Breakdown

✅ Strong LTV:CAC ratio — your customer economics support profitable scaling.

Need to grow LTV across cohorts?

TGM manages $314M+ in DTC ad spend across 200+ brands

We optimize LTV through paid acquisition, lifecycle email + SMS, retention flows, and product mix — the full revenue stack.

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Trusted by 200+ DTC brands

LTV formula: AOV × Purchase Frequency × Customer Lifespan × Gross Margin.
Median DTC LTV: Apparel $180–$280, Beauty $200–$350, Subscription $400–$1,200.
Most brands undercount LTV by 30–50% by truncating at 12 months. True LTV often unfolds over 24–36 months.
3 levers move LTV: AOV (bundles + upsells), purchase frequency (lifecycle email + SMS), customer lifespan (retention flows + subscription).
Highest-leverage moves: Klaviyo welcome + abandoned cart + post-purchase flows lift LTV 15–25%; subscription mix doubles LTV for those cohorts.

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DTC LTV Benchmarks by Vertical

Median customer lifetime value (24-month horizon) across DTC verticals. Subscription brands skew highest; one-time-purchase brands skew lowest.

Vertical	Median LTV (24mo)	Top Quartile	Best in Class
Apparel & Fashion	$220	$320	$500+
Beauty & Skincare	$280	$420	$750+
Health & Supplements	$320	$480	$900+
Food & Beverage	$240	$380	$650+
Home & Garden	$190	$290	$500+
Electronics & Tech	$160	$280	$450+
Pet Products	$310	$460	$800+
Subscription / Recurring	$580	$880	$1,500+

Source: TGM client portfolio across 200+ DTC accounts. Subscription brands compound LTV through recurring revenue + lower churn. Cohort analysis at 36 months typically lifts these numbers 30–50%.

LTV vs. AOV vs. CAC vs. Repeat Rate — The DTC unit-economics chain

Metric	What it measures	Formula	How it connects to LTV
LTV	Total gross profit per customer over their lifetime	AOV × Frequency × Lifespan × Gross Margin	The ceiling. Output of all other metrics combined.
AOV	Average revenue per order	Total Revenue ÷ Total Orders	Direct multiplier on LTV. 10% AOV lift = 10% LTV lift.
Purchase Frequency	Orders per customer per year	Total Orders ÷ Unique Customers	Direct multiplier. Higher freq = faster LTV compounding.
Repeat Rate	% of customers who order again	Repeat Customers ÷ Total Customers	Drives most of LTV growth past first order. 30%+ healthy.
CAC	Cost to acquire a customer	Marketing Spend ÷ New Customers	Constraint. LTV must exceed CAC by 3:1+ to scale profitably.

LTV is the OUTPUT of unit economics. AOV, frequency, and lifespan are the INPUTS. Don't optimize LTV directly — optimize the inputs and let LTV compound.

What Is Customer Lifetime Value (LTV) and Why Does It Matter?

LTV measures the total gross profit a customer generates over their entire relationship with your brand. It’s the most important number in DTC unit economics because it sets the ceiling on what you can spend to acquire customers (CAC) while staying profitable. The formula is straightforward: AOV × Purchase Frequency × Customer Lifespan × Gross Margin. The hard part is measuring it accurately — most brands undercount LTV by 30–50% by truncating at 12 months instead of running 24- or 36-month cohort analysis.

The LTV Formula

LTV = AOV × Frequency × Lifespan × Gross Margin

Example: $80 AOV × 3 orders/year × 2 years × 65% gross margin = $312 LTV per customer. The calculator above models this plus payback period, LTV:CAC ratio, and discount-adjusted LTV.

How LTV Connects to CAC and Profitable Scaling

LTV alone doesn’t tell you if a brand is profitable — it has to be paired with CAC. The healthiest DTC brands run 3:1+ LTV:CAC ratios (every $1 spent acquiring brings $3 in lifetime profit). Brands stuck below 1:1 are losing money on every customer. Above 5:1 usually means under-investing in growth — there’s margin to spend more on acquisition. Use our LTV:CAC Calculator to model the ratio. The other LTV pairing is payback period — how many months to recover CAC from gross profit. Healthy DTC brands aim for < 12 months; subscription brands often < 6 months.

What Is a Healthy LTV for DTC Brands?

The right LTV depends on category, AOV, and repeat-purchase model. One-time-purchase brands (gifts, electronics, furniture) target $150–$300 LTV with 4–5:1 LTV:CAC because LTV is essentially first-order value. Repeat-purchase consumer brands (apparel, beauty) target $250–$500 LTV with 50%+ repeat rate. Subscription / consumable brands target $500–$1,500 LTV with 60%+ retention. Use the calculator above to find your specific LTV, then compare to the benchmark table above for your vertical. The right move is rarely to chase higher LTV directly — instead, lift AOV (bundles), frequency (email/SMS triggers), or lifespan (retention flows + subscription).

Diagnose: why is your LTV low?

Run through these in order. The first “yes” usually points at the highest-leverage fix.

If your repeat-purchase rate is below 30%

LTV is being capped by lack of retention. Build Klaviyo welcome + abandoned-cart + post-purchase flows; add SMS for top 30% of subscribers. Lifecycle email typically lifts repeat rate 15–25%.

If your AOV is below your category benchmark

AOV is a direct multiplier on LTV. Bundles, free-shipping thresholds, post-purchase upsells (ReConvert / OneClickUpsell), and tiered pricing typically lift AOV 15–30%.

If you don’t offer a subscription / replenish option

Subscription cohorts have 2–3× the LTV of one-time buyers. Even a 15% subscription mix doubles LTV for those cohorts. Worth testing for any consumable / replenishable product.

If you measure LTV at 12 months only

You’re likely undercounting LTV by 30–50%. Subscription / repeat-buyer cohorts often deliver 50%+ of total LTV in months 13–36. Pull cohort-level LTV at 24 + 36 months.

If your gross margin is below 50%

Even with strong retention, low margin caps LTV upside. Negotiate COGS, raise prices selectively, or shift to higher-margin SKUs. Margin compounds through every repeat purchase.

If you discount heavily for first-order acquisition

Heavy promo / coupon-driven LTV often degrades 6–12 months later. Discount cohorts have 30–50% lower LTV than full-price cohorts. Strip discounts from LTV measurement.

10 ways to lift LTV this quarter

Tactics ordered by typical impact on LTV. Most ship in a single sprint or quarter.

Build Klaviyo welcome + abandoned-cart + post-purchase flows. Lifecycle email lifts LTV 15–25% — the fastest LTV lever.
Add a subscription / replenish option. Even 15% subscription mix doubles LTV for those cohorts.
Test post-purchase upsells. ReConvert / OneClickUpsell typically add 8–15% to AOV and lift first-order LTV.
Add a free-shipping threshold above current AOV. Lifts AOV 5–15% with no creative changes.
Add SMS for top 30% of email subscribers. SMS-active customers spend 2–3× LTV of email-only.
Build a referral program. Referred customers have 25%+ higher LTV and 60% lower CAC.
Track LTV at 24 months, not 12. Most DTC brands undercount LTV by 30–50% with 12-month measurement.
Tier your loyalty program. 4–6 month inactivity triggers lift LTV 10–15% via reactivation.
Map each cohort separately. Subscription, repeat, one-time cohorts have different LTV curves — managing them as one masks levers.
Strip promo customers from LTV. Heavily discounted cohorts have 30–50% lower LTV. Track full-price LTV separately.

What this calculator cannot tell you

True LTV beyond your cohort horizon. 24-month or 36-month LTV captures most repeat-buyer behavior, but the very-best customers can keep buying for years.
Channel-level LTV variance. Customers acquired from Google Search often have 30%+ higher LTV than Meta cold traffic. Average LTV hides channel differences.
Cohort timing effects. Q4 / promo-acquired customers behave differently than full-price Q1–Q3 cohorts. Always run cohorted LTV.
Discount sensitivity. Heavy promo / coupon-driven LTV often degrades. Strip promo from LTV for true number.

LTV glossary

LTV (Customer Lifetime Value): Total gross profit per customer over their lifetime. Formula: AOV × Frequency × Lifespan × Gross Margin. The ceiling for what you can spend on CAC.
AOV (Average Order Value): Revenue ÷ Orders. Direct multiplier on LTV. Use our AOV Calculator.
Purchase Frequency: Total orders ÷ unique customers per year. Higher frequency = faster LTV compounding.
Customer Lifespan: Average years a customer stays active. Key driver of LTV but hardest to measure accurately — requires multi-year cohort data.
Repeat Rate: % of customers who make a second purchase. Drives most of LTV growth. Healthy DTC brands target 30%+; subscription brands target 60%+.
Gross Margin: (Revenue − COGS) ÷ Revenue. Single biggest LTV multiplier — compounds through every repeat order.
LTV:CAC Ratio: LTV ÷ CAC. The most important unit-economics metric. 3:1+ is healthy. Use our LTV:CAC Calculator.
Payback Period: Months to recover CAC from gross profit. Healthy DTC brands aim for < 12 months. Subscription brands < 6 months.
Cohort Analysis: Tracking customer behavior by acquisition month. The right way to measure LTV — reveals retention curves and payback timing.
Churn Rate: % of customers who stop buying in a given period. Inverse of retention. High churn caps LTV regardless of AOV.

We have helped 200+ DTC brands lift LTV through retention

If your LTV is below category benchmark, we’ll show you which AOV, frequency, and lifespan levers will lift it — calc-driven, free, no obligation.

Book a Free Retention Audit →

Frequently Asked Questions

How is customer lifetime value (LTV) calculated?

LTV = AOV × Purchase Frequency × Customer Lifespan × Gross Margin. Example: $80 AOV × 3 orders/year × 2 years × 65% gross margin = $312 LTV. The calculator above models this plus payback period, LTV:CAC, and discount-adjusted LTV.

What is a good LTV for DTC eCommerce brands?

Median by vertical: Apparel $180–$280, Beauty $200–$350, Health $250–$400, F&B $200–$320, Subscription $500–$1,500. The right LTV depends on AOV, repeat rate, and category. Always benchmark against your specific vertical, not blended.

How do I increase customer lifetime value?

Three biggest levers: (1) raise AOV with bundles + post-purchase upsells (5–15% lift), (2) increase purchase frequency with Klaviyo lifecycle email + SMS (15–25% LTV lift), (3) extend customer lifespan with retention flows + subscription (often 2× LTV for subscribers).

What’s the difference between LTV and AOV?

AOV is per ORDER (Revenue ÷ Orders). LTV is per CUSTOMER over their lifetime (AOV × Frequency × Lifespan × Margin). AOV is a snapshot; LTV is cumulative. A high AOV with no repeat purchases produces lower LTV than a moderate AOV with strong repeat behavior.

How long should I measure LTV?

24 months minimum for most DTC brands; 36 months for subscription / consumable. Many brands undercount LTV by 30–50% with 12-month measurement — subscription / repeat-buyer cohorts often deliver 50%+ of total LTV in months 13–36.

Should LTV include shipping and payment processing costs?

True LTV uses CONTRIBUTION MARGIN, not gross margin — subtract all variable costs (COGS, shipping, payment processing, returns). Most calculators use gross margin which over-counts LTV. The calculator above lets you input gross margin; pair with our Contribution Margin Calculator for true LTV.

How does subscription affect LTV?

Subscription cohorts have 2–3× the LTV of one-time buyers. The compounding effect is why DTC subscription brands often run at $500–$1,500+ LTV vs $200–$300 for one-time-purchase brands. Even 15% subscription mix dramatically lifts blended LTV.

What is LTV:CAC and why does it matter?

LTV:CAC = LTV ÷ CAC. The most important unit-economics metric for DTC. 3:1+ is healthy — enough margin to reinvest in growth. Below 1:1 means losing money. Use our LTV:CAC Calculator to model your ratio.

How does iOS 14.5 / cookie loss affect LTV measurement?

iOS 14.5 affects ad attribution (CAC reporting), not LTV directly. LTV is measured from your CRM / Shopify data which is unaffected. Use first-party data (Shopify customer reports, Klaviyo) for accurate LTV; use blended CAC (total marketing spend ÷ new customers) instead of platform-reported CAC.