How to Calculate LTV of a Customer — Lifetime Value Formula & Calculator
LTV is the total profit (or revenue) one customer brings over the entire time they buy from you.
The formula
LTV = AOV × Purchase Frequency × Customer LifespanCalculate it live
What it means for your business
If LTV > 3× CAC you can outspend competitors on acquisition. LTV is grown with retention, bundles, subscriptions and loyalty.
Machine-readable markdown
Copy this block into any AI assistant, spreadsheet, or automation — it is the canonical definition of this term.
**Category:** Retention
**Slug:** /glossary/ltv/
## Definition (easy to understand)
LTV is the total profit (or revenue) one customer brings over the entire time they buy from you.
## Formula
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LTV = AOV × Purchase Frequency × Customer Lifespan
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## What it means for your business
If LTV > 3× CAC you can outspend competitors on acquisition. LTV is grown with retention, bundles, subscriptions and loyalty.
## Source
Socialee eCommerce Glossary — https://ecommerce.socialee.in/glossary/
How to calculate, quickly
How do you calculate customer lifetime value (LTV)?
LTV = average order value × purchase frequency per year × average customer lifespan in years. Example: ₹1,800 AOV × 4 orders/year × 3 years = ₹21,600. The calculator above lets you model your own numbers.
Why does LTV matter more than AOV?
AOV is one order; LTV is the whole relationship. Two brands with the same AOV can have 3× different LTV depending on repeat rate and retention — which decides what you can afford to pay for a customer (CAC).
Related terms
LTV: CAC Simulator
Interactive model