Retention
Customer Retention Strategies for Small Businesses
Twelve customer retention strategies that work for small businesses, from measuring churn and better onboarding to loyalty rewards and win-back campaigns.
Customer Lifetime Value Calculator
Find out how much gross profit a typical customer brings in over the whole relationship, and whether that justifies what you spend to win them.
Currency
USDUS Dollar · $
EUREuro · €
GBPBritish Pound · £
CHFSwiss Franc
CADCanadian Dollar · CA$
AUDAustralian Dollar · A$
Revenue minus the direct cost of what you sold, as a share of revenue.
Estimate customer lifetime from
Marketing and sales spend divided by new customers won. Leave at 0 to skip.
Customer lifetime value (gross profit)$288
Based on $720 in revenue over 3.0 years per customer.
- Revenue per customer per year
- $240
- Gross profit per customer per year
- $96.00
- Average lifespan
- 3.0 years
- Lifetime revenue
- $720
- LTV:CAC ratio
- 2.4 : 1
- CAC payback
- 15 months
Each new customer brings back 2.4 times what it cost to win them, in gross profit.
Runs entirely in your browser. No data is sent to a server.
How it works
- Pick your currency and enter the average order value and how often a customer buys per year.
- Enter your gross margin so the result reflects profit, not just revenue.
- Estimate customer lifetime either directly in years or from your annual churn rate.
- Optionally add your customer acquisition cost to see the LTV:CAC ratio and how many months it takes to earn that cost back.
FAQ
What is the formula for customer lifetime value?
A practical formula is average order value × purchases per year × gross margin × expected lifespan in years. Using margin instead of revenue tells you what a customer is actually worth to the business.
How do I estimate customer lifespan if I don't know it?
Use your annual churn rate: lifespan ≈ 1 ÷ churn. If you lose 25% of customers each year, the average customer stays about 4 years. For a new business, start with a cautious guess and update it as data comes in.
Should CLV use revenue or profit?
Profit, or at least gross margin. Revenue-based CLV looks bigger but can hide customers who cost more to serve than they bring in. The calculator shows both lifetime revenue and gross-profit CLV.
What does the LTV:CAC ratio tell me?
It compares the gross profit a customer brings in over their lifetime with the cost of acquiring them. Below 1 means you lose money on each new customer; higher values leave more room for overheads and growth.