How we worked it out
Updated as you change the numbers.
- CLV = order value × orders per year × margin × years. With churn c, expected years = 1 ÷ c.
Method and assumptions
A CLV:CAC ratio around 3:1 is a common benchmark for a healthy business. This simple model ignores discounting future profit.
Questions
What is the lifetime value of a $60, 4-times-a-year customer at 40% margin and 30% churn?
About $320 over 3.3 years.
Sources
Method and figures checked on . Every worked answer on this page is covered by an automated test. Found a mistake? Tell us.