Customer Lifetime Value
Estimate contribution from a stable recurring customer relationship.
Your numbers
Undiscounted contribution lifetime value
Assumes constant churn and margin, no expansion and no discounting. Small churn changes can produce large value changes.
Scenario comparison
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Formula
Use LTV = Rm/c−S. R is monthly revenue per customer, m is the contribution-margin fraction, c is the monthly churn fraction, and S is one-time servicing cost. Constant churn gives an expected lifetime of 1/c months; this model does not discount future contributions.
Estimate contribution from a stable recurring customer relationship.
Worked example
- Monthly revenue per customer
- 50
- Contribution margin (%)
- 60
- Monthly customer churn (%)
- 5
- One-time servicing cost
- 0
- Undiscounted contribution lifetime value
- 600
- Expected customer lifetime
- 20 months
Scope and limitations
Assumes constant churn and margin, no expansion and no discounting. Small churn changes can produce large value changes.
Inputs are checked for missing values and allowed ranges. A result outside the finite numeric range is not displayed. Rounding affects display, while the calculation uses the model’s numeric precision.
Check your units and assumptions before relying on a result. Changing a label does not convert a currency or physical unit.
Formula version: 09c3b081862a · Example checked: