SaaS Customer Lifetime Value (LTV) Calculator
Calculate customer lifetime value from your ARPU and churn rate. See how reducing churn increases the long-term value of every subscriber.
Customer lifetime value
$980
Avg. customer lifetime
20 months
Annual revenue / customer
$588
LTV with 1% less churn
$1,225
Reducing your churn rate by just 1% would increase LTV by $245 per customer.
How to calculate SaaS lifetime value
Lifetime value: LTV = ARPU / Monthly Churn Rate. If your average customer pays $49/month and your monthly churn rate is 5%, the expected lifetime value is $980.
Customer lifetime: Average Lifetime = 1 / Monthly Churn Rate. At 5% monthly churn, the average customer stays for 20 months.
The churn lever: Small reductions in churn have an outsized impact on LTV. Going from 5% to 4% monthly churn increases LTV by 25%. Recovering failed payments through dunning is the fastest way to reduce churn without product changes or marketing spend.
Why SaaS LTV matters: Most SaaS businesses use LTV to set acquisition budgets. The standard benchmark is an LTV:CAC ratio of at least 3:1. Below that, you're spending more to acquire customers than they'll ever return. The fastest way to improve the ratio is reducing churn, not raising prices.
Increase your customer lifetime value
Recover failed payments and reduce involuntary churn automatically. ChurnWard starts at $29/month with no percentage fees.