Customer Lifetime Value Calculator

What a customer is really worth · built by Lucas, Google Ads specialist for local businesses

Most businesses judge their ads on the first sale — and conclude a lead costs too much. But a customer who comes back is worth far more. Enter your numbers below to see your lifetime value in revenue and profit — the real figure to budget your marketing against.

$
Typical value of one order or job
/ yr
How often they buy in a year
yrs
How long they stay a customer
%
Profit left after costs
Customer lifetime value (revenue)
$3,600
Total an average customer spends with you over 3 years
Profit lifetime value$1,440
Value per year$1,200
Lifetime purchases12

Estimates only — use averages across your customer base. Profit LTV uses the margin you enter; leave it blank to see revenue only.

How this calculator works

Lifetime value is built from three numbers most owners already know roughly:

  • Revenue LTV = average sale value × purchases per year × customer lifespan (years).
  • Value per year = average sale value × purchases per year.
  • Profit LTV = revenue LTV × profit margin — the figure to actually budget against.
Profit LTV is the number that matters. It's the most you could ever pay to acquire a customer and still come out ahead over the whole relationship — which is why it sets the ceiling for what you can afford to spend on ads.

Worked example

A cleaning client pays $300 a visit, comes back roughly 4 times a year, and stays for about 3 years. That's $300 × 4 × 3 = $3,600 in lifetime revenue — not the $300 a first-sale view would suggest. At a 40% margin, that's $1,440 in lifetime profit. Suddenly a $100 cost to win that customer looks cheap, not expensive.

Why LTV changes how you run Google Ads

When you only count the first sale, every lead looks too pricey and you bid too low — so you lose the auction to competitors who understand their numbers. Knowing LTV lets you:

  • Set a realistic max cost per acquisition — based on what a customer is worth over time, not just today.
  • Bid to win where competitors underbid because they only see the first order.
  • Focus spend on high-LTV services — recurring or high-repeat work justifies more aggressive bidding.
Now turn LTV into a bid ceiling. The Max CPA calculator uses your customer value, margin and close rate to show the most you can afford to pay per lead.
Max CPA Calculator →

Frequently asked questions

What is customer lifetime value (LTV)?

The total revenue or profit an average customer brings over the whole time they buy from you — not just their first purchase.

How do I calculate it?

Average sale value × purchases per year × customer lifespan in years. Multiply by your profit margin for profit LTV.

Revenue LTV vs profit LTV — which should I use?

Profit LTV. It's what's left after costs, and it's the figure to budget marketing against — the most you could spend to acquire a customer and still profit over the relationship.

Why does LTV matter for Google Ads?

It sets the real ceiling for your cost per acquisition. Judge ads on the first sale alone and you'll underbid; judge them on LTV and you can profitably pay more to win customers.

Keep going

Want help turning LTV into a profitable ad budget?

I'll tie your customer value to a bid strategy that wins the right customers — without overpaying. In plain English, no obligation.

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