Find out how much total value a customer brings to your business. Set your marketing budget on solid ground with profit-based LTV and your LTV/CAC ratio.
Customer Lifetime Value (LTV / CLV — Customer Lifetime Value) is the total revenue a customer brings to your business over the time they work with you. LTV shows how much customer acquisition cost (CAC) you can afford and which customer segments you should invest in.
LTV = Average order amount × Annual frequency × Customer lifetime (years)
To see profitability, we multiply by the gross profit margin:
Profit-based LTV = LTV × Gross profit margin (%)
Example: ₺500 average order × 4 purchases per year × 3 years = ₺6,000 revenue LTV. At a 60% margin, profit-based LTV = ₺3,600.
LTV alone is not enough; you need to compare it with customer acquisition cost (CAC). The generally accepted interpretation:
Tip: The fastest way to increase LTV is not finding new customers; it is increasing how often and how long existing customers buy. Regular follow-up with a CRM significantly extends customer lifetime.
Yes. LTV (Lifetime Value) and CLV (Customer Lifetime Value) refer to the same concept: a customer's total lifetime value.
The common benchmark is 3:1. In other words, for every ₺1 you spend on acquisition, you are considered healthy if you get ₺3 in value from the customer. A very high ratio (>5) can mean you are investing too little in marketing.
Profit-based LTV is more accurate for marketing budget decisions because it shows what actually stays in your pocket. Our tool calculates both.
Take the inverse of your annual churn rate: Lifetime ≈ 1 ÷ churn rate. For example, 25% annual churn ≈ 4 years average lifetime.
The three most effective ways are increasing purchase frequency (email, loyalty program), raising order value (cross-sell/upsell) and reducing churn (good customer relationship management).
With ÖzgürKod CRM, segment your customers, follow up regularly and reduce churn. See each customer's true value on your dashboard.