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Customer Lifetime Value (LTV) Calculator

LTV = AOV × Purchase frequency × Customer lifetime (years) × Gross margin %. Tells you how much you can spend acquiring a new customer.

Calculator
Result
LTV KES 18,900.00
Annual revenue per customerKES 18,000.00
Lifetime revenueKES 54,000.00
Lifetime gross profit (LTV)KES 18,900.00
Max CAC for 3:1 paybackKES 6,300.00

Healthy SaaS uses LTV:CAC of 3:1. Retail can go higher because margins fund repeat purchase.

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Why LTV is the SME superpower

Once you know LTV, you know how much you can spend to acquire a new customer. Marketing becomes math, not gut feel.

Veira tracks AOV, frequency and retention per customer automatically.

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Worked examples

AOV 1,500 · 12/yr · 3 yrs · 35% GM
  • LTV = 1,500 × 12 × 3 × 35% = KES 18,900 · Max CAC ≈ KES 6,300

Frequently asked questions

What is CAC?
Customer Acquisition Cost, what you spend to get one new customer.
Why 3:1?
A 3× payback covers all overhead and leaves real profit.
Does retention matter most?
Yes. Doubling retention doubles LTV linearly.
How does Veira measure retention?
Through customer accounts on POS, first-purchase date and last-purchase date.
Can I do this without customer accounts?
Only by survey. Loyalty programmes attribute purchases to identities.

Doing this by hand every time? Veira runs the same calculation automatically on every sale, no spreadsheet required.

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