Free tools / Customer lifetime value calculator
Enter what a customer pays you each month, your gross margin and your monthly churn. See how long a customer stays, what they are worth, and how that compares with what you pay to win them. Free, no signup.
"It’s like the relationship value of the customer. Yup. How long they use your software, how long they pay you for your software. That makes sense. We call it lifetime value"
Rob Walling, Startups for the Rest of Us, Episode 602
"it’s delusional to think that if you can make it to 10 KMRR, you’ll magically get to 100 KMRR. There’s this little thing called churn"
Rob Walling, Startups for the Rest of Us, Episode 768
"usually with a lot of SaaS credit card upfront, the first 30 or 60 days, the churn is a lot higher and then it drops way down because people are using it as an extended trial"
Rob Walling, Startups for the Rest of Us, Episode 764
Ask a mentor built only from Rob Walling’s podcasts and posts about your churn and pricing. Every answer links to where he said it. Three questions free, no signup. Ask Rob Walling about your churn.
Multiply the monthly revenue per customer by your gross margin, then divide by your monthly churn rate. A customer paying $50 a month at 80% margin and 4% monthly churn is worth $50 × 0.8 ÷ 0.04 = $1,000.
On average, 1 ÷ monthly churn. At 4% monthly churn a customer stays 25 months; at 2% they stay 50 months. Halving churn doubles lifetime value.
A common SaaS rule of thumb is 3:1 or better: each customer is worth at least three times what it cost to win them. Below 1:1 you lose money on every customer.
Yes. Customer lifetime value (CLV) and lifetime value (LTV) are two names for the same number. It is not the loan-to-value ratio used for mortgages.
Rob Walling notes that SaaS products that take a credit card up front often see much higher churn in the first 30 to 60 days, because people use the first months as an extended trial. Measure churn on customers past that window too.