Customer Lifetime Value (LTV)

Calculate the total value a customer brings over their lifetime

From Revenue Architecture

LTV = (ARPA × Gross Margin%) ÷ Churn Rate%

LTV represents the total revenue you can expect from a customer over their entire relationship with your company. A healthy LTV:CAC ratio should be at least 3:1 according to Revenue Architecture principles.

Input Parameters

Average Revenue Per Account (ARPA)

Monthly or annual revenue per customer

Gross Margin (%)

Percentage of revenue retained after direct costs

Churn Rate (%)

Monthly or annual customer churn rate

Results

Customer Lifetime Value

per customer

Average Customer Lifetime

months

Interpretation

Enter your values to see the interpretation

ARPA

Margin

Churn

Ways to Improve LTV

• Reduce Churn: Focus on customer success and retention
• Increase ARPA: Upsell, cross-sell, and pricing optimization
• Improve Margins: Optimize costs and pricing
• Calculate CAC: Ensure LTV:CAC ratio is at least 3:1

Fill in the parameters and click Calculate to see your LTV

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