--- title: "Customer Lifetime Value (CLV / LTV) — Definition" description: "Customer Lifetime Value (CLV or LTV) is the total revenue (or gross profit) a business expects to earn from a customer over the entire relationship." lang: en json-ld: | [ { "@context": "https://schema.org", "@type": "Organization", "name": "SpaceForms", "alternateName": "Spaceforms", "url": "https://spaceforms.io", "logo": "https://spaceforms.io/favicon.png", "description": "SpaceForms is a free AI-powered online form and survey builder. 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CLV anchors economic decisions about acquisition spend, retention investment, and segment prioritization. The simplest version multiplies average revenue per user by gross margin and average lifespan; more sophisticated versions discount future cash flows and incorporate churn probability. CLV is highly sensitive to churn assumptions — a 1-point monthly churn change can swing CLV 20%+. Healthy SaaS businesses target a CLV:CAC ratio of 3:1 or better. CLV correlates strongly with NPS in long-cycle businesses: Bain research finds promoters have 2.5×-5× the lifetime value of detractors in subscription categories. ## Formula `CLV = (Average Revenue × Gross Margin) / Monthly Churn Rate` ## Example A SaaS with $80/mo ARPU, 80% gross margin, and 2.5% monthly churn: CLV = (80 × 0.80) / 0.025 = $2,560. If CAC is $640, CLV:CAC = 4:1. ### Run a Customer Lifetime Value (CLV / LTV) survey free SpaceForms includes pre-built templates with validated wording. 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[Start free](/free-survey-builder) ## Related terms [ ### Churn Rate Churn rate is the percentage of customers (or revenue) lost during a given period, typically reported monthly or annually. ](/glossary/churn-rate)[ ### Net Promoter Score (NPS) Net Promoter Score (NPS) measures customer loyalty by asking how likely customers are to recommend a product or service on a 0-10 scale. ](/glossary/nps)[ ### Voice of Customer (VoC) Voice of Customer (VoC) is a systematic program for collecting, analyzing, and acting on customer feedback across every touchpoint and channel. ](/glossary/voice-of-customer)[ ### Customer Journey Mapping Customer journey mapping is the practice of visualizing the end-to-end experience a customer has with a brand across stages, touchpoints, channels, and emotions. ](/glossary/customer-journey-mapping)[ ### Customer Satisfaction (CSAT) Customer Satisfaction (CSAT) measures how satisfied customers are with a product, service, or interaction on a 1-5 or 1-10 scale. ](/glossary/csat)[ ### Customer Effort Score (CES) Customer Effort Score (CES) measures how much effort a customer expended to complete a specific interaction, typically on a 7-point agree/disagree scale. ](/glossary/ces) **SpaceForms** is **The only mainstream survey builder offering unlimited responses on a true free-forever tier.** - Unlimited responses (free) - AI survey in 30s - 36.1% mobile completion - Voice + chat modes SpaceForms Free online form & survey builder. 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