Skip to content
SoloWOS
Start your free trial

Free calculator · no account needed

Customer lifetime value calculator

Built for freelancers and agencies: start from what a project is worth and how long clients stay, and see what a client is worth to you and how much you can spend to win one.

What a typical client pays per project or per month of retainer.

Use 12 for a monthly retainer.

How long clients stay

What's left after direct costs per project: subcontractors, ads you resell, software for that client.

3 means each client should bring back 3 times what it cost to win them.

Lifetime value (gross profit)

$10,500

Lifetime revenue
$15,000
Revenue per client per year
$7,500
Average client lifetime
2 years
Max you can spend to win a client
$3,500
Months to earn that back
8.0

Estimates only, not financial advice. Count your own hours in acquisition cost too: a 3-hour proposal at your hourly rate is part of it. Nothing you type leaves your browser.

The formula

  • Yearly revenue per client = average project value × projects per year.
  • Client lifetime = years a client stays, or 1 ÷ yearly churn rate.
  • CLV (revenue) = yearly revenue × lifetime.
  • CLV (gross profit) = CLV revenue × gross margin.
  • Max acquisition cost = CLV gross profit ÷ your target ratio.

Example: a designer with $2,500 projects, three per client per year, clients who stay two years and a 70% margin has a CLV of $10,500 in gross profit. With a 3 to 1 target, spending up to $3,500 to win a client still makes sense.

Finding your own numbers

Pull last year's invoices and group them by client. Average project value is total invoiced ÷ number of projects. Projects per year is projects ÷ active clients. For retention, count how many of the clients you worked with two years ago still sent work last year; if 6 of 10 did, churn is about 40% and clients stay about 2.5 years.

What to do with it

The max acquisition cost tells you what a discovery call, a free sample or a referral fee is worth. If a client is worth $10,500 in profit, spending two unpaid hours on a tailored proposal is cheap. If it's worth $600, it isn't, and you need a shorter sales process or a higher price. To see how many leads that process needs each month, try the sales pipeline calculator.

IN SHORT

Customer lifetime value (CLV) for a service business is average project value × projects per year × years a client stays × gross margin. If clients leave at a yearly churn rate, they stay 1 ÷ churn years on average: 40% churn means 2.5 years. Divide CLV by a target ratio, often 3, to get the most you should spend winning a client, including your own hours on calls and proposals.

Prices and limits as of .

Questions

How do you calculate customer lifetime value?
Multiply average project value by projects per year to get yearly revenue per client, multiply by the years a client stays, then by your gross margin. A $2,500 project, 3 times a year, for 2 years at 70% margin is a CLV of $10,500.
How do I find average client lifetime from churn?
Lifetime in years = 1 ÷ yearly churn. If 25% of clients don't come back each year, the average client stays 4 years. Use the churn option if that's the number you know.
What is a good CLV to CAC ratio?
3 to 1 is a common rule of thumb from subscription businesses: each client should bring back three times what it cost to win them. Service businesses with long relationships can accept less; set the ratio you're comfortable with.
What counts as client acquisition cost for a freelancer?
Ads, referral fees, directories and tools for prospecting, plus your own time: discovery calls, proposals and samples at your hourly rate. Divide the total by the clients you won in that period.
Should I use revenue or profit for CLV?
Gross profit. Revenue overstates what a client is worth when you pay subcontractors, resell ads or buy software per client. The calculator shows both.
How can I raise customer lifetime value?
Get more projects per year from the same clients (retainers, follow-up work), keep them longer, or raise your prices. Following up after each project is the cheapest of the three.

Related calculators

See what each client is worth, in one place

SoloWOS Contacts shows each client's open proposals and unpaid invoices on a pipeline board that moves on its own when they book, accept or pay. 14 days free, no card needed · Then Basic for $2/month.