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Customer Lifetime Calculator

Estimate customer lifetime (months) from monthly churn rate (a simple approximation).

Customer lifetime is an intuitive way to translate churn into a time horizon: how long a typical customer stays active before churning.

This calculator uses a constant monthly churn shortcut. It also reports median lifetime and retention after a chosen horizon to help you reason about compounding.

Prefer an explanation- Read the guide.
Need definitions- Browse the glossary.
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%
Used to compute retention after N months (for example 12).
Tip: you can type commas (e.g., 10,000).

Example

Using the default inputs, the result is:
33.3 months
Monthly churn rate
3%
Horizon (months)
12

How to calculate

  1. Enter monthly churn rate (customer churn, not revenue churn).
  2. Review expected lifetime (1 / churn) as a quick estimate.
  3. Review median lifetime and retention at a horizon (for example 12 months).
  4. Use cohort curves for precision when churn changes by tenure.

Formula

Customer lifetime (months) ~= 1 / monthly churn rate
  • Assumes churn is roughly constant over time (often untrue early vs late).
  • Useful as a planning shortcut; cohort curves are more accurate.

Benchmarks

  • Small changes in churn can create large changes in lifetime because churn is in the denominator.
  • Median lifetime is often more conservative than 1/churn when churn is not very small.
  • Pair lifetime with gross margin to estimate LTV and with CAC to estimate payback feasibility.

FAQ

Why is this only an estimate-
Churn usually changes by tenure (early churn is higher). This formula assumes churn is constant, so it should be used as a quick approximation or compared across segments consistently.

Common mistakes

  • Mixing monthly churn with annual ARPA or annual retention (unit mismatch).
  • Using NRR/GRR as if it were customer churn (different denominators).
  • Assuming churn is constant when early churn is much higher than steady-state churn.

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Calculate Customer Acquisition Cost (CAC) from total acquisition spend and new customers.
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Calculate fully-loaded CAC by including paid spend plus sales & marketing costs (salaries, tools, and other acquisition costs).
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LTV Calculator
Estimate customer Lifetime Value (LTV) using ARPA, gross margin, and churn rate.
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LTV Sensitivity Calculator
See how gross profit LTV changes as churn and gross margin vary (simple 3x3 sensitivity).
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LTV:CAC Calculator
Compute LTV:CAC ratio and CAC payback using ARPA, gross margin, churn, and CAC.
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CAC Payback Period Calculator
Estimate how many months it takes to recover CAC (months to recover CAC) using gross profit.

Quick checks

  • Keep time units consistent (monthly vs annual) across inputs and outputs.
  • Segment by cohort/channel/plan before trusting a blended average.
  • Use the related guide to avoid common definition and denominator mismatches.