Customer Lifetime Value Worksheet
cecil@ceciljonesmarketing.com • ceciljonesmarketing.net
Customer Lifetime Value Calculator
Most business owners don't know what a customer is actually worth — which means they don't know what they can afford to spend acquiring one. Calculate your real LTV and use it to make smarter marketing decisions.
Instructions
- 1. Work through Steps 1–5 in order. Each step builds on the previous one.
- 2. Use real data where you have it. Estimate conservatively where you don't.
- 3. Run the calculation for your overall business first, then repeat for your top 2 service lines.
- 4. The LTV:CAC ratio in Step 5 is the single most important number in your marketing — it tells you whether you're spending too much or too little on acquisition.
Step 1: Average Transaction Value
Step 2: Purchase Frequency
Home services benchmark: 1.2–2.5× per year for active residential customers. Lower = more opportunity for retention improvement.
Step 3: Average Customer Lifespan
Home services benchmark: 3–7 years for residential if you have any retention activity. 1–3 years if you don't.
Step 4: Gross Lifetime Value
Formula: Avg Transaction Value × Purchases/Year × Customer Lifespan
Step 5: LTV:CAC Ratio
3:1 or higher: Healthy. You can afford to spend more on acquisition.
1:1 to 3:1: Functional but tight. Look for retention improvements before increasing acquisition spend.
Below 1:1: You're spending more to acquire a customer than they're worth. Fix retention, raise prices, or reduce acquisition cost immediately.
Strategic Decisions Based on Your LTV
Related Playbook: LTV Improvement • Related Calculator: Lead Value Calculator • Email: cecil@ceciljonesmarketing.com
Use This Worksheet
Print or save as PDF. To have a specialist walk through this calculation with your real numbers, book a free Strategy Call.
Questions? cecil@ceciljonesmarketing.com