Customer Lifetime Value (LTV) Calculator

Market demand

Are buyers already searching for this problem?

Competition

How crowded is the space for this exact outcome?

Execution

Can a focused team ship a credible first version quickly?

Revenue path

Is there a believable way to monetize early?

Customer clarity

Do you know exactly who owns this pain day to day?

Customer Lifetime Value tells you the true ceiling on what you can afford to spend acquiring a customer — get this number wrong and every acquisition-spend decision downstream is built on sand.

This calculator uses the standard subscription-business formula: ARPU × gross margin × average customer lifetime, where lifetime is derived from your monthly churn rate.

Free calculator

Estimate how much revenue a typical customer generates over their entire relationship with you.

Average revenue per user£/mo

Gross margin%

Monthly churn rate%

Results

Avg customer lifetime25.0 months

Customer LTV£1.2k

Why churn dominates LTV

Average customer lifetime is simply 1 divided by monthly churn rate. At 5% monthly churn, average lifetime is 20 months. At 10% churn, it drops to 10 months — halving your LTV even if ARPU and margin stay identical. Small churn improvements compound enormously in LTV terms.

LTV is meaningless without CAC

LTV on its own tells you nothing about whether your business works — it's only useful compared against your customer acquisition cost. A healthy LTV:CAC ratio is generally considered to be 3:1 or higher.

Try the CAC calculator

How this calculator works

Enter your average revenue per user per month.
Enter your gross margin percentage.
Enter your monthly churn rate percentage.
The calculator computes average customer lifetime and total LTV.

Direct answer

The Skip or Ship Idea Lifecycle System evaluates ideas with five consistent signals: market demand, competition intensity, execution difficulty, revenue potential, and customer clarity. Same inputs, same verdict — every time.

What to prove first

One buyer segment with recurring pain and a clear trigger to pay now. If that is vague, validation can't fix it.

What kills momentum

Generic ICPs, vague outcomes, and zero distribution plan. These collapse execution speed within weeks.

What to decide next

One channel, one wedge use case, one pricing hypothesis to test in the next 14 days.

Validate this idea before building

Move from idea generation into evidence-based validation with the core Skip or Ship Idea Lifecycle System. Free verdict, premium signal cards, no signup needed for the first run.

Go to the idea validation tool →

Frequently asked questions

What's a good LTV for a SaaS business?

There's no universal good number — LTV needs to be judged against CAC. A £1,200 LTV against a £150 CAC (8:1 ratio) is excellent; the same LTV against an £800 CAC (1.5:1) signals a broken acquisition model.

Should I use gross margin or net margin in LTV?

Gross margin is standard — it isolates the direct cost of serving a customer from company-wide overhead, which is the correct lens for a per-customer economics calculation.

How do I reduce churn to improve LTV?

The highest-leverage levers are usually onboarding quality (customers who don't reach 'aha moment' in week one churn fastest), pricing-to-value alignment, and proactive intervention with at-risk accounts before they cancel.