Accounting Customer Lifetime Value Calculator Examples
Worked examples showing how revenue, margin, retention, discount rate, and acquisition cost affect customer lifetime value.
These examples use the calculator's annual discounted gross-profit method. They show how different customer economics can lead to materially different gross and net lifetime value estimates.
Low-margin retail customer
A retail business evaluates a customer relationship over three years.
Input Summary
Annual revenue
$600
Gross margin
35%
Annual retention
70%
Discount rate
10%
Analysis period
3 years
Acquisition cost
$80
Calculation Breakdown
- 1Annual gross profit$600 × 0.35$210
- 2Discounted retention factor0.70 / 1.100.6364
- 3Gross CLV$210 × 0.6364 × (1 - pow(0.6364, 3)) / (1 - 0.6364)$298.14
- 4Net CLV$298.14 − $80$218.14
Result Summary
Net CLV
$218.14
Accounting Customer Lifetime Value Calculator
Gross CLV is about $298 and net CLV is about $218.
Five-year subscription customer
A subscription business estimates the value of a typical new account.
Input Summary
Annual revenue
$1,200
Gross margin
60%
Annual retention
85%
Discount rate
10%
Analysis period
5 years
Acquisition cost
$300
Calculation Breakdown
- 1Annual gross profit$1,200 × 0.60$720
- 2Discounted retention factor0.85 / 1.100.7727
- 3Gross CLV$720 × 0.7727 × (1 - pow(0.7727, 5)) / (1 - 0.7727)$1,774.18
- 4Net CLV$1,774.18 − $300$1,474.18
Result Summary
Net CLV
$1,474.18
Accounting Customer Lifetime Value Calculator
Gross CLV is about $1,774 and net CLV is about $1,474.
Higher acquisition-cost B2B customer
A B2B service company reviews customer economics over seven years.
Input Summary
Annual revenue
$8,000
Gross margin
50%
Annual retention
90%
Discount rate
12%
Analysis period
7 years
Acquisition cost
$4,000
Calculation Breakdown
- 1Annual gross profit$8,000 × 0.50$4,000
- 2Discounted retention factor0.90 / 1.120.8036
- 3Gross CLV$4,000 × 0.8036 × (1 - pow(0.8036, 7)) / (1 - 0.8036)$12,784.87
- 4Net CLV$12,784.87 − $4,000$8,784.87
Result Summary
Net CLV
$8,784.87
Accounting Customer Lifetime Value Calculator
Gross CLV is about $12,785 and net CLV is about $8,785.
How to Read Your Results
Gross lifetime value is the discounted gross profit estimate before acquisition cost.
Net lifetime value is gross lifetime value less the customer acquisition cost entered.
A higher retention rate generally increases the contribution from later years.
A higher discount rate generally reduces the present value of later-year gross profit.
Compare results only when definitions of revenue, margin, retention, and acquisition cost are consistent.
Assumptions & Important Notes
- Examples use annual revenue, annual retention, and annual discounting.
- Revenue and gross margin are held constant within each example.
- Acquisition cost is deducted once at the start of the customer relationship.
Related Examples
Frequently Asked Questions
Can I use these examples for monthly subscription data?
Use annualized inputs, or use a model designed to apply retention and discounting monthly.
Why can gross CLV be positive while net CLV is low or negative?
Gross CLV excludes acquisition cost. A high acquisition cost can reduce net CLV substantially.
Should I use average results for every customer segment?
Separate calculations by segment can be more informative when margins, retention, or acquisition costs differ meaningfully.
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Use the live calculator with your own inputs, timing, and preferences.