Research Lab / Calculators
Customer Lifetime Value (CLV) Calculator, Formula & Excel Template
Calculate your gross profit CLV estimate with revenue, margin, and churn. Choose SaaS or Subscription based on your business, then use the formula, examples, and Excel template to go deeper.
What is Customer Lifetime Value (CLV or LTV)?
Customer lifetime value is the estimated gross profit a business earns from an average customer relationship. People use CLV and LTV interchangeably, but they are essentially the same thing. The formula starts with monthly revenue, adjusts for gross margin, then uses churn to approximate how long the revenue will likely be coming in.
A CLV figure is your comparison point for forecasting and financial modeling when variables like churn and recurring revenue are relatively predictable.
Why CLV matters for SaaS and subscription businesses
For SaaS teams, CLV puts account revenue, gross margin, and retention in the same conversation. For subscription teams, it connects subscriber value to cancellations and renewals.
SaaS customer lifetime value formula
SaaS CLV = (average monthly revenue per account × gross margin) ÷ monthly revenue churn
Use this formula when you measure recurring revenue by account and track monthly revenue churn.
Subscription customer lifetime value formula
Subscription CLV = (average monthly subscription revenue per subscriber × gross margin) ÷ monthly subscriber churn
Use this formula when you measure recurring revenue by subscriber, member, or another recurring consumer relationship.
CLV to CAC ratio for SaaS and subscription growth
CLV to CAC ratio = customer lifetime value ÷ customer acquisition cost
Compare a gross profit CLV against a CAC definition your team applies consistently.
Analyze CLV by cohort, plan, and channel
Break a representative CLV number apart by acquisition month, plan tier, segment, channel, account size, offer type, renewal term, or subscriber behavior. Keep your definitions of revenue, margin, and churn identical across every group you compare.
How SaaS and subscription businesses increase CLV
Useful CLV improvements tend to come from better fit, faster early value, healthier retention, higher account or subscriber value, and protected gross margin.
Customer Lifetime Value Excel Template
The workbook includes editable input cells, visible formulas, a SaaS example, a Subscription example, and a CLV to CAC comparison.
SaaS CLV calculation example
With $300 in monthly revenue per account, an 80% gross margin, and 4% monthly revenue churn, gross profit CLV is $6,000. At a $1,500 customer acquisition cost, the CLV to CAC ratio is 4 to 1.
Subscription CLV calculation example
With $25 in monthly subscription revenue per subscriber, an 80% gross margin, and 5% monthly subscriber churn, gross profit CLV is $400.
Frequently asked questions
Is CLV the same as LTV?
Usually, yes. Both terms describe the same estimated value of a customer relationship over time.
Should I use the SaaS or Subscription mode?
Use SaaS if your team thinks in accounts and account level recurring revenue. Use Subscription if you think in individual subscribers, members, readers, or another recurring consumer relationship.
Does this calculator show revenue CLV or gross profit CLV?
Gross profit CLV. The formula applies gross margin before it estimates the lifetime.
Why is churn required?
Because it stands in for how long the relationship lasts. At zero churn, the formula divides by zero, which is undefined.