Estimate undiscounted retail customer lifetime value as average order × orders per year × years × gross margin.
| CLTV | – |
Use this CLTV calculator for a shop or marketplace sketch: how much gross profit a typical customer is worth if they keep buying for a fixed number of years. It is not the SaaS LTV on the CAC & LTV page (ARPU × margin ÷ churn) and it does not discount cash flows.
CLTV = average order × orders per year × years × gross-margin%. There is no churn curve: years is how long you assume they stay.
Average order: Typical basket or invoice, before margin.
Orders / year: How many times they buy in a year.
Years: How many years you count them as a customer.
Gross margin (%): Profit after variable cost of the goods, e.g. 40 for 40%.
CLTV: Undiscounted lifetime gross profit.
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