Estimate customer lifetime value (LTV) — enter average revenue per user (ARPU), gross margin, and monthly churn rate to see how much each customer is worth over their lifetime. Results update live.
Frequently Asked Questions
How is customer lifetime value calculated?
LTV = (ARPU × Gross margin %) ÷ Monthly churn rate. With $50 ARPU, 70% margin, and 5% churn: ($50 × 0.70) ÷ 0.05 = $700 lifetime value per customer.
What is ARPU?
Average revenue per user — the mean monthly revenue each customer generates. Divide total monthly revenue by active customers to find your ARPU.
Why does churn matter for LTV?
Lower churn means customers stay longer and generate more revenue. Use the Churn Rate Calculator to measure your monthly or annual churn.
How does LTV relate to customer acquisition cost?
A healthy business typically maintains LTV at 3× or more of customer acquisition cost (CAC). Pair LTV with the ROI Calculator to evaluate marketing spend.
Is this tool free and does it work on mobile?
Yes on both counts. The Customer Lifetime Value Calculator on draft21 is completely free with no sign-up required and works on all devices.