Customer lifetime value (LTV) calculator.

How this calculator works (same formula nouz uses)

Customer lifetime value (LTV) is the total contribution margin one customer generates over their whole relationship with your store. It is the ceiling on what you can profitably pay to acquire them — the number that turns "our ads feel expensive" into an actual decision. This calculator builds LTV from contribution margin, not revenue, because only the margin is money you keep.

In plain English: Per-order margin = AOV × gross margin %; yearly contribution = per-order margin × orders per year; LTV = yearly contribution × customer lifespan in years. It also shows your maximum sustainable CAC at a 3:1 LTV:CAC ratio, which is simply LTV ÷ 3.

A worked example

Using the defaults — AOV €65, gross margin 40%, 3 orders per year, a 4-year lifespan:

• Contribution per order: €65 × 40% = €26
• Contribution per year: €26 × 3 = €78
• Lifetime value: €78 × 4 = €312
• Maximum CAC at 3:1: €312 ÷ 3 = €104

So this customer is worth €312 in real margin over four years, and you can spend up to about €104 to acquire them before the economics stop making sense. Notice how each input compounds: lifting gross margin from 40% to 50% would raise LTV to €390 (€65 × 50% × 3 × 4), and a fifth year of loyalty instead of four adds another €78. Small, believable improvements to repeat rate and margin move the ceiling far more than a one-off AOV bump, which is why retention is usually the cheapest way to buy more acquisition headroom.

What a healthy number looks like

LTV is only meaningful next to CAC. The widely used rule of thumb is a 3:1 LTV:CAC ratio: for every €1 spent acquiring a customer you want about €3 of lifetime margin back. That cushion covers overhead, the prospects who never convert, and lifespans that run shorter than you hope. Below 3:1 is tight; at or under 1:1 you lose money on every customer. A ratio far above 3:1 (say 5:1 or more) is not always a trophy — it can mean you are under-investing and leaving growth on the table. The two inputs that swing LTV hardest are orders per year and lifespan; a one-time buyer with a 0.5-year lifespan has a fraction of the LTV of a loyal repeat customer.

Common mistakes

• Using revenue instead of margin. Revenue LTV is a vanity number — you cannot spend the part that goes to COGS, shipping and fees on acquiring the next customer.
• Assuming an optimistic lifespan. Guessing four years when your cohort data says one inflates LTV and quietly greenlights overspending on ads.
• Treating LTV as fixed. It moves with every change to AOV, repeat rate and margin — recompute it when those shift.
• Ignoring the gap between one-time and repeat buyers. Blending them into one average hides that repeat customers carry almost all the value.

When to use it — and what's next

Use LTV whenever you decide how much to spend on acquisition, or whether a retention play — subscriptions, replenishment reminders, loyalty tiers — is worth building. It is a planning input based on the figures you enter; nouz does not pull order history from your store or spend from ad platforms, because it is a simple daily profit tool, not an analytics suite. To translate this ceiling into an actual acquisition budget, use the sibling CAC calculator and compare the two numbers directly.