Answers · Calculator

Customer lifetime value calculator

Ascent Vision · Published October 24, 2026

This calculator works out what a typical customer is worth over the time they stay with you: average sale times purchases a year times years, with your margin applied and, if you want, one round of referrals. From that it gives the most you can spend to win one customer at a target return you choose, and what that allows per inquiry at your close rate. It is arithmetic on your own numbers, not a forecast, and the numbers you type are not stored or sent anywhere.

Run your own numbers

The fields hold example numbers, made up to show the arithmetic. Replace them with your own. Money is in dollars.

Average sale, in dollars Purchases a typical customer makes in a year Years a typical customer stays (a one-off customer is 1) Margin, percent (what is left after the direct cost of the work) Share of customers who send you one more customer, percent (optional: 0 leaves referrals out) Target return: margin dollars back for each dollar spent (1 is break-even) Close rate, percent (the share of inquiries you win)

Results, in dollars

Lifetime revenue from one customer

3,600

Lifetime margin from one customer

1,440

Lifetime margin including one round of referrals

1,728

The most you can spend to win one customer

576

That figure is

at 3 dollars of margin back per dollar spent

What that allows per inquiry

144

That figure is

at a close rate of 25%

Without JavaScript the fields do not recompute: the results shown are the worked example.

How the numbers are worked out

• Lifetime revenue = average sale × purchases a year × years a customer stays.
• Lifetime margin = lifetime revenue × margin.
• With referrals = lifetime margin × (1 + the share of customers who send one more customer). It counts one round of referrals, each worth the same as the customer who sent them, and no further rounds.
• The most you can spend to win one customer = lifetime margin (with referrals, if you gave a share) ÷ target return. A target of 1 is break-even: you get back in margin what you spent. A target of 3 means three dollars of margin for each dollar spent.
• What that allows per inquiry = the figure above × close rate, since only that share of inquiries becomes a customer.

The worked example

Made-up numbers, chosen to keep the arithmetic easy to follow. They are not anyone's real figures.

What to put in each field

• Average sale, purchases and years: from your own records, for the typical customer, not the best one. If most customers buy once, purchases is 1 and years is 1. If you sell more than one service and their values differ a lot, run the calculator once per service.
• Margin: what is left of a sale after the direct cost of doing the work, as a percent.
• Referral share: leave it at 0 unless you can see referrals in your records. The related answer on whether to have a referral program covers asking for them and tracking them.
• Target return: how much room you want. A target of 1 only breaks even over the customer's whole stay, which can take years to arrive; a higher target leaves room for the costs this page does not count and for the customers who leave early.
• Close rate: inquiries won ÷ inquiries that ended won or lost, from your records.

How to use the number

Compare "the most you can spend to win one customer" with the cost per customer each channel actually has. The marketing ROI calculator works that cost out from a period's spend and inquiries. A channel that costs more per customer than that figure falls short of the return you chose, and one that costs more than the lifetime margin itself (the figure at a target of 1) loses money over the customer's whole stay, however busy it makes you look; one that costs much less is one to grow. The related answer on what a customer is worth covers the same figure in words and why to refresh it once a year.

Repeat purchases and referrals are where the value usually sits, and they are inputs owners often leave at a guess. Staying in touch with past customers can raise the purchases and the years; the related answer on whether email marketing is worth it covers the simplest way to do that. The inquiries calculator then turns a monthly goal into the inquiries it takes. This is arithmetic on your own numbers, not a forecast.

Related answers

• How do you work out what a customer is worth to your business?
• Should a small business have a referral program?
• Is email marketing worth it for a small service business?

The other calculators

• Marketing ROI calculator: Enter spend, inquiries, close rate, job value and margin to see cost per inquiry, cost per customer, net return and your break-even close rate.
• How many inquiries do you need? A calculator: Turn a monthly revenue or jobs goal, job value, close rate and show rate into the inquiries you need each month and week, and the gap by channel.