Calculator
Customer Lifetime Value Calculator
See what a repeat customer is really worth. Enter your average ticket, service visits per year, plan fee, gross margin, and annual retention rate to get customer lifetime value both plainly and discounted to today's money, plus average customer lifespan, LTV:CAC ratio, and how fast you earn back what you paid to win the contractor customer. Free, no signup.
Free
Customer typeSwitching loads typical starting numbers for that customer — replace them with your own.
Revenue per customer / year$439 of that is gross profit
$798DiscountingFuture profit is worth less than profit today. The discount rate converts later years into today’s money.
78.0% retention4.5 yrs average lifespan
Customer lifetime value
$1,508
Gross profit over the whole relationship, in today’s money — 3.4× one year of profit.
Well above 3:1 — you may be under-investing in marketing
Value net of acquisition costAfter $240 to win the customer · 6.3:1 LTV:CAC
$1,268Lifetime value at a glance
Lifetime value (discounted)
$1,508Includes the job in hand, first year undiscounted
Future repeat business only
$1,069What the relationship is worth from here, excluding today’s job
Undiscounted lifetime value
$1,994$439/yr × 4.5 yrs
Average customer lifespan
4.5 yrs1 ÷ 22.0% churn
Lifetime revenue
$3,625$798/yr across 1.5 visits
LTV:CAC ratio
6.3:13:1 or better is the widely used benchmark
CAC payback
6.6 mo≈ 1.0 service call to earn it back
Where a lifetime of revenue goes
- Cost to deliver the work: $1,631
- Acquisition cost: $240
$3,625 of lifetime revenue leaves $1,754 in gross profit once you have paid to deliver the work and to win the customer.
Plan member vs one-off caller
A maintenance-agreement customer books on a schedule, pays a recurring fee, and renews — so both the annual profit and the retention rate that drives lifespan are higher. A one-off emergency caller may never call again, which is why the same acquisition cost can be a bargain for one and a loss on the other. Switch the customer type above to compare the two with your own numbers, then check the result against the Marketing ROI Calculator to see what that customer actually cost you.
Industry benchmarks
- LTV:CAC target
- 3:1 or better
- Under-investing signal
- Above 5:1
- Average lifespan
- 1 ÷ churn rate
- CAC payback
- Under 12 months
Recurring-service customers are worth multiples of a one-time call. Blended gross: 45–60% for most home-service trades.
What you'll get
Pick the customer you are modeling
Start from a maintenance-agreement member or a one-off emergency caller. They behave nothing alike, because the plan member books on a schedule, pays a recurring fee, and renews, so the calculator loads realistic starting numbers for each and lets you replace them with your own.
Enter revenue, margin, and retention
Average ticket × visits per year plus any annual plan fee gives revenue per customer per year; your gross margin turns that into annual gross profit. Your annual retention rate sets the average lifespan, 1 ÷ churn, so 80% retention is a five-year customer.
Read lifetime value two ways
You get the simple figure (annual gross profit × lifespan) and the discounted figure, which shrinks later years to what they are worth today. It also splits out future repeat business only: what the relationship is worth from here, excluding the job already in hand.
Check it against what you paid
Add your cost to acquire a customer to see lifetime value net of acquisition, your LTV:CAC ratio against the 3:1 benchmark, and CAC payback in both months of gross profit and service calls.
How it works
- 1
Pick the customer you are modeling
Start from a maintenance-agreement member or a one-off emergency caller. They behave nothing alike, because the plan member books on a schedule, pays a recurring fee, and renews, so the calculator loads realistic starting numbers for each and lets you replace them with your own.
- 2
Enter revenue, margin, and retention
Average ticket × visits per year plus any annual plan fee gives revenue per customer per year; your gross margin turns that into annual gross profit. Your annual retention rate sets the average lifespan, 1 ÷ churn, so 80% retention is a five-year customer.
- 3
Read lifetime value two ways
You get the simple figure (annual gross profit × lifespan) and the discounted figure, which shrinks later years to what they are worth today. It also splits out future repeat business only: what the relationship is worth from here, excluding the job already in hand.
- 4
Check it against what you paid
Add your cost to acquire a customer to see lifetime value net of acquisition, your LTV:CAC ratio against the 3:1 benchmark, and CAC payback in both months of gross profit and service calls.
How contractor contractors calculate customer lifetime value
The first job is rarely where a home-service customer makes you money. A $450 tune-up looks thin next to a $250 cost to acquire, until you count the second visit, the plan renewal, and the system replacement seven years out. Customer lifetime value puts a number on that whole relationship, which is the only fair way to judge what a lead is worth paying for. It also exposes the opposite case: a one-off emergency caller who never rings again can be acquired at a loss, and averaging them together with your plan members hides it.
This calculator runs both standard models. The simple form is average ticket × visits per year × average lifespan × gross margin, where lifespan is 1 ÷ churn. The retention form sums the same profit stream as a geometric series and discounts it: CLV = m × (1 + d) ÷ (1 + d − r), with m the annual gross profit, r retention, and d your discount rate. It also reports the widely published r ÷ (1 + d − r) variant, which excludes the purchase already in hand. The two answer different questions, and most published calculators do not say which one they are giving you. From there you get LTV:CAC against the 3:1 benchmark and CAC payback. Pair it with the Marketing ROI Calculator to see what a channel actually charged you per customer, the Profit Margin Calculator to get your gross margin right first, and the Business Valuation Calculator when a book of retained customers becomes the thing you are selling.
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View licensing guidesCustomer Lifetime Value Calculator FAQs
How do I calculate customer lifetime value for a contractor business?
Multiply your average ticket by visits per year and add any annual plan fee to get revenue per customer per year, then multiply by your gross margin for annual gross profit. Average lifespan is 1 ÷ (1 − retention rate), so 80% annual retention is five years. Lifetime value is annual gross profit × lifespan. Example: a $450 ticket seen twice a year plus a $180 plan fee is $1,080 of revenue; at 55% margin that is $594 a year, and at 85% retention the customer stays 6.7 years, roughly $3,960 of gross profit.
Why does the discounted lifetime value differ from the simple one?
Profit you collect in year seven is not worth as much as profit you collect today, so the discounted model divides each future year by (1 + discount rate) before adding it up. That series has a closed form: annual gross profit × (1 + d) ÷ (1 + d − r). Set the discount rate to 0% and it collapses exactly back onto the simple figure. Our model books cash at the start of each period and does not discount the first year, so the headline number is the value of a customer you are about to win, the right figure to compare against acquisition cost.
What is a good LTV:CAC ratio?
Three to one or better is the widely cited benchmark, meaning lifetime value should be at least three times what you spend to acquire the customer. Below 1:1 you lose money on every customer you buy. Above roughly 5:1 the ratio is healthy but often means you are under-investing in marketing and leaving growth on the table. Check CAC payback alongside it: a contractor usually recovers acquisition cost on the first ticket or not at all.
Why is a maintenance plan member worth so much more than a one-off call?
Two reasons compound. The plan member generates more revenue per year (scheduled visits plus the recurring fee), and they retain far better, which stretches the lifespan that revenue is multiplied by. A one-off emergency caller may bill a higher single ticket but book well under one visit a year and rarely come back, so the same acquisition cost can be a bargain for one and a straight loss on the other. Model them separately, because averaging them together is what hides the problem.
Is this customer lifetime value calculator free?
Yes. Every tool on CloseCrew is free for contractors, no account required. Use it with the Marketing ROI Calculator to see what each lead source really costs per customer, and the Profit Margin Calculator to pin down the gross margin this calculation depends on.
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