Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Lifetime value (contribution)
$139
Annual value per customer
$46
Suggested max CAC
$46
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How to use this
- 1Enter average order value ($).
- 2Enter orders per customer per year.
- 3Enter contribution margin (%).
- 4Enter expected years active.
- 5Enter target ltv : cac ratio.
- 6Read your lifetime value (contribution) on the right — it updates as you type.
- 7Hit Share to keep the scenario or send it to someone.
About this calculator
For ecommerce, the most actionable LTV model uses observable repeat purchase behavior rather than complex cohort survival curves: average order value times purchases per year times contribution margin percentage times expected years as an active customer. This gives you gross contribution LTV, the number that should set your acceptable customer acquisition cost, since a $40 AOV product with strong repeat behavior can justify a much higher CAC than a one-and-done $150 purchase. Enter average order value, average number of orders per customer per year, contribution margin percentage on those orders, and expected years the customer keeps buying before churning. The calculator outputs annual value per customer, total lifetime value, and a suggested maximum CAC using a standard LTV:CAC ratio target. This is meant as a directional planning tool, not a precise cohort model, so revisit it quarterly against your actual repeat purchase rate data as it accumulates.
Worked example
Using the values the calculator loads with:
Inputs
- Average order value: 55 $
- Orders per customer per year: 2.4
- Contribution margin: 35 %
- Expected years active: 3
- Target LTV : CAC ratio: 3
Results
- Lifetime value (contribution): $139
- Annual value per customer: $46
- Suggested max CAC: $46
What each field means
Inputs
- Average order value ($)
- The average order value used in the calculation, measured in $. Starts at 55 $ so you have a working example on load.
- Orders per customer per year
- The orders per customer per year used in the calculation. Starts at 2.4 so you have a working example on load.
- Contribution margin (%)
- The contribution margin used in the calculation, measured in %. Starts at 35 % so you have a working example on load. Accepted range: 0–100 %.
- Expected years active
- The expected years active used in the calculation. Starts at 3 so you have a working example on load.
- Target LTV : CAC ratio
- The target ltv : cac ratio used in the calculation. Starts at 3 so you have a working example on load.
Results
- Lifetime value (contribution)
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual value per customer
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Suggested max CAC
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Is this LTV based on revenue or profit?
Profit — specifically contribution margin, since it nets out COGS, shipping, and fees before multiplying by frequency and years. Revenue-based LTV overstates what you can actually afford to spend acquiring a customer, since it ignores the cost of fulfilling every order.
What's a realistic LTV:CAC ratio target?
3:1 is the widely cited healthy benchmark across subscription and ecommerce businesses, meaning lifetime profit should be at least three times what you spent to acquire the customer. Below 2:1 usually signals a business that struggles to fund growth from its own margins.
How do I estimate years active if I'm a new store?
Use industry benchmarks conservatively at first — 2-3 years is reasonable for most consumables and mid-frequency categories — then replace it with your own cohort retention data once you have 12-18 months of order history to analyze actual repeat behavior.
Does this account for the time value of money?
No, this is a simple undiscounted model. For most DTC planning purposes over a 2-4 year horizon, discounting doesn't change decisions much, but if you're running longer subscription LTV models, consider discounting later-year cash flows.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
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Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Repeat Purchase LTV Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/repeat-purchase-ltv
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/repeat-purchase-ltv" target="_blank" rel="noopener">Repeat Purchase LTV Calculator — RevenueLab</a> (2026).</p>
Source: [Repeat Purchase LTV Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/repeat-purchase-ltv) (2026).