Unit Economics
Customer Lifetime Value Calculator
Calculate how much a single customer is worth over their entire relationship with your business. Vital for setting acquisition budgets.
What this calculator does
The Customer Lifetime Value Calculator determine the total revenue expected from a customer, then compares your result against operator benchmarks (SMB: $1k-$5k. Mid-market: $10k-$50k. Enterprise: $100k+). Enter your numbers below and you'll get a result, a benchmark band, and a plain-English interpretation in under two minutes.
Inputs
Monthly recurring revenue per customer
Revenue minus cost of goods sold
Percentage of customers lost per month
Results
Customer lifetime value
$12.5K
Total value over customer lifetime
Average customer lifespan
33.3 months
Monthly contribution margin
$375
LTV vs B2B SaaS benchmarks
Mid-market
What this means
$12,500 is healthy mid-market LTV. You have room to invest in CAC, pair this with your payback period to optimize spend.
Formula
LTV = (ARPU × Gross Margin %) / Monthly Churn RateBenchmarks: SMB: $1k-$5k. Mid-market: $10k-$50k. Enterprise: $100k+
Sources: OpenView 2024 SaaS Benchmarks, ChartMogul Retention Reports, ProfitWell Pricing Studies, and Pressense operator data.
Frequently asked questions
Why include gross margin in LTV?
Gross margin accounts for the cost of delivering your software (hosting, support, payment processing, customer success). Revenue is not all profit, only the margin is what your business actually retains and can reinvest.
How do I increase LTV?
Three levers: increase ARPU through expansion revenue and pricing, reduce churn to extend retention, or improve gross margin by automating support and infrastructure. Reducing churn typically has the biggest compounding effect.
What's wrong with the simple LTV formula?
The formula assumes constant churn and ARPU forever. In reality, both change, surviving customers tend to churn less and expand more. For investor-grade LTV, use cohort-based analysis, not steady-state formulas.
Should I use customer or revenue churn for LTV?
Use net revenue churn (after expansion) if you have strong expansion motion, it produces a more accurate, often much higher, LTV. Use gross customer churn for a conservative number you can defend.
About this calculator
Built and reviewed by the Pressense team, a strategy and systems partner working with B2B SaaS operators on unit economics, retention, GTM, and positioning. Every calculator in this library uses public benchmarks from OpenView, ChartMogul, ProfitWell, and KeyBanc, supplemented with anonymised data from the operators we partner with.
Disclaimer: This calculator is for educational and planning purposes only. Outputs are estimates based on the inputs you provide and industry benchmarks, not financial, tax, legal, or investment advice. Validate all results with a qualified professional before making decisions about funding, valuation, hiring, or capital allocation.