Customer Lifetime Value

What is one customer
worth to your business?

CLV (Customer Lifetime Value) shows how much profit one customer generates over the whole relationship — and why retention is the cheapest way to grow.

5–25×
more expensive to acquire a new customer than to retain one (Harvard Business Review)
+1 yr
of retention is often worth more than a new-customer campaign
60–70%
chance of selling to an existing customer (5–20% for a new one)
The CX value path
1What a customer is worthCLV calculator → 2What loyalty deliversNPS calculator → 3What inaction costsROI calculator
Calculator

Calculate your customer value

Move the sliders to match your company metrics — results update in real time. If you don't know the exact number, use an estimate.

Average order value (€) ?Average value of one purchase or order in euros. 250 €
€10€5 000
Purchases per year ?How many times an average customer buys per year. In B2B services often 1–12, in retail more. 6
152
Customer retention (years) ?How many years an average customer stays. With 20% annual churn, average tenure is ~5 years (1 ÷ 0.20). 3
Don’t know the lifetime? Enter annual churn: % → lifetime = 1 ÷ churn
110
Margin (%) ?Gross margin — the percentage of revenue left after direct costs. 30%
5%80%
Active customers ?How many customers actively buy today. Used to calculate the value of your whole customer base. 1 000
5020 000
Annual customer value
€450
profit per year (margin-based)
CLV — one customer
€1,350
over the whole retention period
Whole customer base
€1.35M
CLV × number of customers

The model shows undiscounted CLV (a simple profit stream over the retention period). This is a conservative, easy-to-explain assumption; applying a discount rate would make the long-horizon value slightly lower. Use it as a direction for decisions, not as an accounting figure.

“+1 year of retention” scenario €450,000 of additional profit across the base if the average customer stayed one year longer — with no new acquisition costs
Cumulative value of one customer over the years

Let's talk about customer retention → What does customer loss cost? →

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How it's calculated

A formula with no black boxes

CLV = average order value × purchases per year × retention years × margin. This is the conservative, most widely used formula — without discounting and without the referral effect, which you can estimate in the NPS calculator.

01
Why margin, not revenue
CLV is calculated on profit, not turnover — otherwise a customer would look more valuable than they really are. Margin shows what you actually earn from every euro.
02
Retention from churn
If you know your annual churn, retention = 1 ÷ churn. For example, 25% annual churn means an average customer relationship of ~4 years.
03
What CLV changes in decisions
Knowing CLV lets you answer: how much a new customer is worth paying for, how much to invest in retention, and which customer segments matter most.
From numbers to decisions
CLV grows when customers stay longer.
And customers stay longer when the experience is consistent. A CX audit shows exactly where you lose customers — and what to change first.
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