FREE TOOL · WHAT IS A LONG-TERM CLIENT WORTH?
Free B2B customer lifetime value calculator
Estimate the lifetime value of a B2B client from revenue, margin and churn, and see what a point of better retention is worth.
Free. No sign-up. Runs in your browser: nothing you type is stored or sent.
What a client is worth
Gross profit per client per year: $24,000. Winning a client pays back in about 10 months of profit.
What retention is worth
| If churn falls by | Churn | Lifetime | 5-year value | Gain |
|---|---|---|---|---|
| Today | 15% | 6.7 yrs | $82,492 | |
| 1 point | 14% | 7.1 yrs | $84,051 | +$1,559 |
| 2 points | 13% | 7.7 yrs | $85,643 | +$3,151 |
| 5 points | 10% | 10 yrs | $90,621 | +$8,129 |
Gain is per client. Multiply by your client count to see what better retention is worth across the book.
How to use this
- Lifetime value is an estimate. It is only as good as your churn and margin numbers.
- Use gross profit, not revenue, so delivery cost is included.
- Run it for a typical client and again for your best segment.
- The ratio labels are rules of thumb, not benchmarks.
How to use the b2B customer lifetime value calculator
- 01
Enter revenue and margin
Annual revenue per client and gross margin after the cost of delivery.
- 02
Add churn and growth
Annual churn, yearly growth of a kept client, a discount rate and the years to look ahead.
- 03
Compare scenarios
See simple and multi-year value, the value-to-cost ratio and what lower churn is worth.
What is customer lifetime value?
Customer lifetime value (CLV) is the gross profit you expect to earn from a client over the whole relationship. The simple formula is annual revenue per client times gross margin, divided by annual churn. It shows how much you can spend to win and keep a client.
The customer lifetime value formula
Simple CLV = annual revenue per client × gross margin ÷ annual churn. Average lifetime in years is 1 ÷ churn.
The multi-year view adds yearly growth of a kept client, the chance a client is still with you each year and a discount rate for money received later.
- Use gross profit, not revenue.
- Use churn for the same type of client.
- Treat the result as an estimate.
Lifetime value vs cost to win a client
Compare lifetime value with what it costs to win a client. Many teams aim for a ratio of about three to one, but the right number depends on your cash and growth plans. A low ratio means each new client takes a long time to pay back.
For account-led businesses, retention and expansion are often cheaper than new business.
Why retention changes lifetime value so much
Lifetime depends on churn. Cutting churn from 15% to 10% lengthens average lifetime from about 6.7 years to 10 years. The sensitivity table shows what a point or two of better retention is worth per client.
Calculate by segment
Clients are not equal. Run the numbers for your best clients and your typical clients. If key accounts are worth many times more than others, they deserve a named owner and a plan.
Frequently asked questions
How do you calculate customer lifetime value?
Multiply annual revenue per client by gross margin, then divide by annual churn. For example, 60,000 × 40% ÷ 15% is 160,000.
What is a good CLV to CAC ratio?
Many teams target around three to one. Use it as a guide, and think about payback time and cash as well.
Should I use revenue or profit?
Use gross profit. Revenue ignores the cost of delivering the work, so it overstates what a client is worth.
How does churn affect lifetime value?
Lower churn means a longer average lifetime and more total profit. Even a small change can have a large effect.
Is the customer lifetime value calculator free?
Yes. It is free, needs no account and runs in your browser. Nothing you enter is stored or sent.