Free CLV software tool: estimate gross-margin customer lifetime value from average order value, purchase frequency, and customer lifespan.
Cohort projection
What it does
Projects CLV with cohort analysis by modeling churn, expansion, gross margin, and revenue per customer over multiple years.
Why it matters
CLV compared to CAC tells you whether you can afford to acquire customers profitably and how much room you have to invest in retention.
Definition
Customer lifetime value (CLV) is the total gross margin you expect from a customer relationship over its lifetime — not just revenue.
Assumptions
How to interpret your results
If CLV is not several times higher than CAC (depending on your model), revisit pricing, retention, or acquisition efficiency.
How to improve
Pair with CAC
Compare CLV to CAC and payback — that trio is the core of unit economics.
Use segments
Enterprise vs SMB customers often have very different CLV; model them separately.