Customer Lifetime Value Calculator
Margin-based and discounted, not revenue.
Lifetime value
$178.49
against $452.40 of lifetime revenue
Revenue-based LTV overstates this by 2.53×, because it counts money that goes to cost of goods and treats a pound arriving in 3.0 years as worth a pound today. Acquisition decisions built on the revenue figure justify spending several times what the customer is actually worth.
How the Customer Lifetime Value Calculator works
Revenue-based lifetime value treats a pound arriving in three years as identical to one arriving today, and ignores that most of it goes to cost of goods. Both errors point the same way — together they routinely overstate LTV by a factor of three, which is how businesses justify acquisition costs that bankrupt them.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How is lifetime value calculated?
Order value times purchase frequency times lifespan, multiplied by contribution margin, then discounted back to today. The last two steps are the ones usually skipped.
Why use contribution rather than revenue?
Because you cannot spend revenue that goes to suppliers. A customer generating £500 of revenue at 40% margin is worth £200, and acquiring them for £300 is a loss however good the revenue figure looks.
Why discount future value?
Because money later is worth less than money now, and because distant predictions are less reliable. A 12% annual discount rate cuts a year-three pound to about 71 pence.
How do I estimate lifespan?
One divided by churn rate gives the average. Better still, measure it by cohort — the average hides a shape where half the customers leave quickly and a tail stays for years.