Revenue held against CAC
On the figures above revenue says the customer covers their acquisition 2,6 times; contribution says 1,4. The difference is the goods, parcels and fees revenue never subtracted.
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Customer lifetime value calculator
What a customer is worth over a period you choose, in revenue and in contribution after goods, shipping and payment fees, set against what they cost to win and the month they pay it back.
Lifetime value in contribution, over 12 months
€76,13
LTV to CAC
1,4x
revenue says 2,6x
Orders per customer
1,70
over 12 months
Paid back
month 4
cumulative margin reaches CAC
One customer
One order
How customers come back
Observed from your own orders, not predicted: the share that ordered again and how often they did.
What a customer costs to win
↑ ↓ to nudge, Shift for ten. Commas or dots both work.
One customer
14Revenue€144,84
17Goods−€55,0438,0%
21Shipping−€10,917,5%
23Fees−€2,761,9%
25Contribution€76,1352,6%
27CAC−€55,00
29After CAC€21,13
Margin by monthof CAC
First order€44,6881%
Month 3€52,5496%
Month 6€60,41110%
Month 9€68,27124%
Month 12€76,13138%
The first order repays 81% of the acquisition and the customer has paid back by month 4. Repeat orders are spread evenly across the period here; the LTV tab in nouz reads the real months from your own cohorts.
Revenue says €144,84. After goods, shipping and fees, 52,6% of it is margin, and that is the part that can repay the €55,00 the customer cost to win.
See LTV by cohort on my real orders
An estimate from flat rates. In nouz every order is priced from the costs of its own day.
What this calculator does
What it does
A customer lifetime value calculator multiplies what one customer orders over a period by what each order is worth. This one gives both readings: revenue LTV, the figure most tools print, and contribution LTV after goods, shipping and payment fees, the part that can actually repay what the customer cost to win.
Why contribution
Revenue LTV says what a customer spends, not what they leave you.
Most lifetime value calculators multiply an order value by how often a customer buys and stop there. That is a revenue figure, and set against acquisition cost it flatters every campaign that bought the customer, because the goods, the parcel and the payment fee come out of every one of those orders.
Contribution LTV takes them out first: each order counts with what it leaves after the goods, shipping and packing, and the payment fee, CM2 on a nouz statement. That is the only part of a customer’s spend that can repay what it cost to win them, so it is the one to hold against CAC.
Timing matters as much as the total. A customer who repays acquisition with the first order funds the store’s growth; one who repays it in the eleventh month has to be financed until then, which is why the calculator names the payback month as well as the ratio.
The LTV tab in nouz does this per cohort, customers grouped by the month of their first order, in revenue and in contribution, with the month blended CAC is paid back.
Where it goes wrong
Four ways an LTV flatters the ads that bought it.
Each one makes acquisition look cheaper than it is, which is the one direction an LTV figure must never err in.
Young customers counted as finished
A customer who first bought last month has not had a year to come back. Averaging them into a twelve-month value drags it down; leaving out the slow-returning months drags it up. Count each customer only as far as they have been observed.
A lifetime nobody has lived yet
An open-ended lifetime multiplies today’s repeat rate by years nobody has observed. Value a fixed period you can check, such as twelve months, and extend it only as your own history does.
CAC from the platforms' own figures
Attributed customers are claimed by more than one platform, which makes each platform’s cost per customer look lower than the store’s. Blended CAC, all ad spend over all new customers, cannot be shared out twice.
Worked example
One customer, a year, two answers
The calculator’s starting customer: a €85,00 order without VAT, goods at 38%, a €6,40 parcel and 1,9% in fees, so each order leaves €44,68.
32% of new customers come back within 12 months for 2,2 more orders each, which is 1,70 orders per customer on average, and each one cost €55,00 to win.
Revenue says €145 a customer, 2,6 times what they cost. Contribution says €76, 1,4 times, and only that second figure pays for anything.
The first order covers 81% of the acquisition, so every new customer is financed until month 4, when the repeat orders have paid them back. Knowing that month is what lets a store decide how fast it can afford to grow.
In the app
nouz works this out from every order, every day.
A calculator works from flat rates you type once. nouz prices every single order from the cost rules that were in force on that order's own date, and rebuilds the same statement every night from your own orders and your own ad spend.
- Every cost at the rate of its own day. Product costs, parcels and payment fees per order, so a price change never rewrites last month.
- Ad spend comes in by itself. Meta, Google and TikTok through their official APIs, plus anything you add by hand or by CSV.
- The same lines, per product. What is left after product costs, after shipping and payment fees, and after ads, for every product you sell.
How do I calculate customer lifetime value?
Multiply the orders a customer places over a period by the value of an order. Orders per customer are the first order plus the repeat orders of the share who come back: at 32% returning for 2,2 more each, that is 1,70. Value the orders in revenue and in contribution after goods, shipping and fees, because only the second can pay for acquisition.
Why measure LTV in contribution rather than revenue?
Because revenue includes the goods, the parcel and the payment fee, none of which can pay for anything else. On the figures above a customer brings in €145 of revenue but €76 of contribution, so a €55 acquisition cost that revenue says is covered 2,6 times is covered 1,4 times. Every LTV to CAC ratio built on revenue flatters the advertising that bought the customer.
What is a good LTV to CAC ratio?
Above 1 on contribution, a customer repays what they cost to win within the period you measured; below it, every new customer is bought at a loss. How far above 1 a store needs to be depends on its cash: a customer who pays back in month eleven needs a year of financing behind them, one who pays back on the first order needs none.
When does a customer pay back what they cost to win?
In the first month their cumulative contribution reaches the CAC. On the figures above the first order covers 81% of it and the customer has paid back by month 4. The calculator spreads repeat orders evenly across the period; the LTV tab in nouz reads the real months from your own cohorts.
Are refunds taken off?
No, as on nouz's own LTV tab: each order counts at its order date, before any later refund. For a store with heavy returns, read the figure as an upper bound and set the return rate beside it.
How is this different from the CAC payback calculator?
The CAC payback calculator asks one question: how long until a customer repays acquisition, from orders a year. This one values the customer over a whole period in revenue and in contribution, sets both against CAC and shows the month the payback falls in.
More calculators
Four that go with this one.
Each one is a different question about the same statement. All 32 are free, and none of them asks you to sign up.
All calculatorsCAC payback calculator
Whether the first order pays for the customer, and how long it takes when it does not.L25CM2L27MarketingL29CM3POAS calculator
What each euro of advertising earned back in margin rather than revenue, beside the ROAS the platform reports.L19CM1L25CM2L29CM3+5MER calculator
What your advertising returns measured against your own revenue and your own margin, not against what the platforms claim.L14Net revenueL25CM2L29CM3+1Contribution margin calculator
Three margins instead of one, because the goods, the order and the customer are three different questions.L25CM2L29CM3L33EBITDA+7
The terms this calculator uses
- Customer lifetime valueWhat a customer is worth over all their orders, not just the first.
- Repeat rateThe share of orders that came from customers you already had.
- CACWhat it costs to win one new customer.
- Payback periodHow long a customer takes to repay what winning them cost.
- Contribution per orderWhat one average order leaves after its own costs.
- Average order valueRevenue divided by orders. The number per-order costs live off.
- CM2CM1 minus the cost of fulfilling the order and getting paid.
The long version
Want the long version rather than the arithmetic?
Blended, one storeMER 3,94 · POAS 1,93the same spend, two questions7 min readMER, POAS or ROAS: which number should you steer onPlatform ROAS is the most reported and least reliable number in ecommerce. Two blended alternatives are harder to game and easier to trust.MER, POAS or ROASLifetime value by cohort, in contribution.
The LTV tab in nouz follows each month's new customers in revenue and in contribution, with LTV by first product, first-order promotion and country, and the month blended CAC is paid back, all from your own orders.
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