What is customer lifetime value?
The total profit you expect from a customer over their whole relationship with you. Here it is ARPU times gross margin times how many months they stay.
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LTV Improvement Impact Calculator
Estimate customer lifetime value and see how lifting ARPU, margin or lifespan changes it.
LTV = ARPU × gross margin% × lifespan ; compare before/after
Frequently asked questions
What is ARPU?
Average Revenue Per User, the typical revenue one customer brings in per period. It is a building block of lifetime value.
Which lever moves LTV most?
It depends on your numbers, which is why the calculator lets you change ARPU, margin and lifespan together. Often lengthening lifespan (reducing churn) is the quiet powerhouse.
Why include gross margin?
Because revenue is not profit. Multiplying by margin turns the figure into the actual profit a customer generates, which is what their value really is.
How does LTV guide spending?
It sets the ceiling on what you can sensibly pay to acquire a customer. If LTV rises, you can afford to spend more to win customers and still profit.