Customer Lifetime Value Calculator
What is one customer worth over the years they stay with you, in revenue and in profit, and what does that let you pay to win the next one? Pick a trade, adjust the numbers to your books, and read the answer live.
Free. No email required to see results.
Loads planning defaults for job value, visits, retention and margin. A tune-up or repair most years, a replacement once a decade.
Revenue per visit or per job, including parts.
Decimals are fine. A roof once every ten years is 0.1.
Average customer lifespan. If you know annual churn, years retained is roughly 1 divided by churn: 25 percent churn is 4 years.
Revenue minus labor and materials on the job, before overhead. Home services usually land between 35 and 60 percent.
Set to 0 to see the direct relationship only. 15 to 30 percent is typical for a business that asks.
Monthly marketing spend divided by new customers that month. Guess if you do not track it; the result tells you whether it matters.
Profit lifetime value of one hvac customer
$4,752
$8,640 in revenue over 8 years, including the 20 percent who refer someone.
Direct relationship
- Revenue per year
- $900
- Revenue CLV
- $7,200
- Profit CLV
- $3,960
- First-year profit
- $495
Against your acquisition cost
31.7 : 1
profit CLV to CAC
Underspending on acquisitionYou earn back the $150 acquisition cost after 1 job.
Most you should pay per customer
$1,584
at a 3 to 1 profit CLV to CAC ratio
At a 40 percent close rate that is $634 per lead. Compare it with what Local Services Ads and search ads charge in the cost per lead calculator.
Email yourself these numbers
Optional. Your results are already visible above. We send the inputs and outputs as a short summary.
How to calculate customer lifetime value
The customer lifetime value formula is average job value, times jobs per year, times years retained. That is revenue lifetime value. Multiply by gross margin to get profit lifetime value, which is the number that decides what you can spend to win a customer. If you track churn instead of years, years retained is 1 divided by annual churn: a lawn care company that loses 25 percent of accounts a year keeps the average account 4 years. Referrals sit on top: if one in five customers sends you one more customer, each customer is worth 1.2 times the direct number.
Worked example at the HVAC defaults: $600 a job, 1.5 jobs a year, 8 years, 55 percent margin. Revenue lifetime value is $7,200; profit lifetime value is $3,960; with 20 percent of customers referring, $4,752. At a 3 to 1 ratio the most you should pay to acquire that customer is $1,584, which at a 40 percent close rate is $634 a lead. Most HVAC companies pay $40 to $150 a lead, which is why the ratio comes out so far above 3 and why the ones that stop marketing in a slow month are leaving money on the table.
Planning defaults by trade
The numbers the trade picker loads. They come from the funnels we track for our own home service clients and are meant as starting points, not benchmarks to hit.
| Trade | Job value | Jobs / year | Years | Margin | Profit CLV |
|---|---|---|---|---|---|
| HVAC | $600 | 1.5 | 8 | 55% | $3,960 |
| Plumbing | $450 | 1.2 | 6 | 55% | $1,782 |
| Electrical | $600 | 0.8 | 7 | 50% | $1,680 |
| Roofing | $11,000 | 0.1 | 15 | 35% | $5,775 |
| Lawn care (recurring) | $55 | 24 | 4 | 45% | $2,376 |
| House cleaning (recurring) | $180 | 24 | 3 | 40% | $5,184 |
| Pest control (quarterly) | $120 | 4 | 5 | 60% | $1,440 |
How to raise lifetime value
- Jobs per year. A maintenance membership turns a 0.8-visit customer into a 2-visit customer. The HVAC service agreement template is the contract most of our clients start from.
- Years retained. Customers who leave a review stay longer and refer more. How to get 100 Google reviews is the system.
- Referral rate. Ask at the moment of the five-star review, not six months later. Every point of referral rate is a point of lifetime value.
- Acquisition cost. The cheapest customer is the one who called and got answered. Missed call text back recovers the ones who did not, and the close rate calculator shows what each point of close rate is worth.
Know your number, then buy customers below it
Most service businesses we meet could pay three to five times more per lead than they do and still clear a 3 to 1 ratio. The strategy call maps your lifetime value to the channels in your market and tells you where the next customer is cheapest.
Frequently asked questions
How do you calculate customer lifetime value?
Average job value, times jobs per year, times the number of years a customer stays, gives revenue lifetime value. Multiply by gross margin for profit lifetime value, which is the number to compare against acquisition cost. A plumbing customer worth $450 a visit, 1.2 visits a year, for 6 years is $3,240 in revenue and about $1,780 in gross profit at a 55 percent margin.
What is a good customer lifetime value to CAC ratio?
Three to one on profit lifetime value is the floor we use for a local service business. Below that, growth eats cash. Above five to one you are probably underspending on acquisition and could buy more customers at the same price.
Should I use revenue or profit for lifetime value?
Profit, when deciding what to spend on marketing. Revenue lifetime value is useful for valuing the business and for seeing the size of the relationship, but you pay for leads out of gross margin, not out of revenue.
How do referrals change lifetime value?
Each customer who sends you one more customer roughly doubles their value. Enter the share of customers who refer at least one job and the calculator adds that referred customer's value to the original one. For roofers and remodelers, referrals are most of the lifetime value because the direct relationship is one job.
What is the fastest way to raise customer lifetime value?
Jobs per year and years retained move faster than job value. Maintenance memberships for HVAC and plumbing, seasonal contracts for lawn care, and a review request after every visit are the three levers we see work. A customer who leaves a review stays longer and refers more.