About ltv calculator
Customer lifetime value (LTV) estimates the total profit you earn from a customer over the time they stay.
Formula
LTV = monthly revenue per customer × gross margin ÷ monthly churn rate. ₹1,000 a month, 70% margin and 4% churn gives 1,000 × 0.7 ÷ 0.04 = ₹17,500.
LTV to CAC
A common benchmark is an LTV of at least three times CAC. Lower values suggest the business may be spending too much to grow.
A worked example
A customer pays ₹800 a month at a 60 percent gross margin, and 5 percent of customers leave each month. LTV is 800 × 0.6 ÷ 0.05 = ₹9,600. With a CAC of ₹2,000 the LTV to CAC ratio is 4.8, which is healthy.
Improving LTV
Reduce churn with better onboarding and support, raise prices carefully, and offer upgrades so that satisfied customers spend more.
