{
  "$schema": "https://soudcoh.com/tools/data/index.json",
  "slug": "customer-lifetime-value-calculator",
  "name": "Customer lifetime value",
  "category": "Cost per lead",
  "url": "https://soudcoh.com/tools/customer-lifetime-value-calculator",
  "dataUrl": "https://soudcoh.com/tools/data/customer-lifetime-value-calculator.json",
  "currency": "AUD",
  "updated": "2026-08",
  "summary": "Add repeat jobs, retention and referrals to the first job to find what a customer is worth in gross profit, and set it against what you pay to acquire one.",
  "whatItDoes": [
    "Adds the first job, the repeat work and the referrals into one revenue figure over the life of a customer, then takes your gross margin off it.",
    "Divides that by what you pay to acquire a customer, so you get a ratio and a payback period rather than a vanity number.",
    "Shows how much of the lifetime value arrives after the first job, which is the part a break-even calculation misses entirely."
  ],
  "howToUse": [
    "Enter the value of the first job and how many further jobs the average customer books in a year.",
    "Enter how many years they stay. Be conservative — most businesses have less retention data than they think, and this input drives the whole result.",
    "Enter referrals per customer over that life. Count only referrals that became paid work.",
    "Enter what it costs you to acquire a customer. The cost per booked job calculator produces exactly that figure."
  ],
  "formula": [
    "Repeat revenue = first job value × repeat jobs per year × years retained",
    "Referral revenue = referrals per customer × first job value",
    "Lifetime revenue = first job + repeat revenue + referral revenue",
    "Lifetime value = lifetime revenue × gross margin",
    "Payback = acquisition cost ÷ gross profit on the first job"
  ],
  "interpret": [
    "If most of the value arrives after year one, your acquisition budget can be larger than a single-job break-even allows — but only if you can survive the cash gap while it arrives.",
    "The payback figure is the practical one. A business that recovers acquisition cost on the first job can scale spend quickly; one that takes three jobs cannot, however good the lifetime number looks.",
    "Retention is the input with the most leverage and the least evidence in most businesses. Measure it before you plan on it."
  ],
  "limitation": "No published lifetime value figure exists for any trade in any market, so every input here is yours and there is no benchmark to compare against. Assumed retention is where this calculation goes wrong: a lifetime value built on four years of loyalty nobody has measured will justify an acquisition budget the business cannot actually afford.",
  "inputs": [
    {
      "key": "firstJob",
      "label": "First job value",
      "kind": "currency",
      "default": 1200,
      "min": 1,
      "max": 10000000,
      "unit": "AUD",
      "help": "The job that brought them in, excluding GST.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "repeatPerYear",
      "label": "Further jobs a year",
      "kind": "number",
      "default": 0.6,
      "min": 0,
      "max": 365,
      "unit": "count",
      "help": "Average across all customers, including the ones who never come back. Most trades are well under one.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "years",
      "label": "Years they stay",
      "kind": "number",
      "default": 4,
      "min": 0.25,
      "max": 50,
      "unit": "count",
      "help": "Be conservative. This input has more leverage on the result than any other.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "referrals",
      "label": "Referrals that became work",
      "kind": "number",
      "default": 0.3,
      "min": 0,
      "max": 100,
      "unit": "count",
      "help": "Over the whole life, per customer. Only count the ones that ended in an invoice.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "margin",
      "label": "Gross margin",
      "kind": "percent",
      "default": 40,
      "min": 1,
      "max": 100,
      "unit": "percent",
      "help": "After labour and materials.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    },
    {
      "key": "cac",
      "label": "Cost to acquire a customer",
      "kind": "currency",
      "default": 300,
      "min": 0,
      "max": 1000000,
      "unit": "AUD",
      "help": "All-in, not media only. The cost per booked job calculator gives you this.",
      "sourceId": null,
      "sourceNote": null,
      "options": null
    }
  ],
  "defaults": {
    "firstJob": 1200,
    "repeatPerYear": 0.6,
    "years": 4,
    "referrals": 0.3,
    "margin": 40,
    "cac": 300
  },
  "exampleResult": {
    "headline": {
      "label": "Lifetime value, in gross profit",
      "value": "$1,776.00",
      "note": "$4,440 of revenue over 4 years"
    },
    "outputs": [
      {
        "label": "Lifetime revenue",
        "value": "$4,440",
        "note": "3.7 jobs including referrals"
      },
      {
        "label": "Value per year",
        "value": "$444.00",
        "note": "Gross profit, averaged over the life"
      },
      {
        "label": "Arrives after the first job",
        "value": "73%",
        "note": "$1,296.00 of the total"
      },
      {
        "label": "Lifetime value to acquisition cost",
        "value": "5.92×",
        "note": "No published benchmark exists for this ratio"
      },
      {
        "label": "Jobs to pay back acquisition",
        "value": "0.6",
        "note": "$300.00 ÷ $480.00 of profit per job"
      }
    ],
    "workings": [
      {
        "label": "Repeat revenue",
        "expression": "$1,200.00 × 0.6 a year × 4 years = $2,880"
      },
      {
        "label": "Referral revenue",
        "expression": "0.3 × $1,200.00 = $360"
      },
      {
        "label": "Lifetime revenue",
        "expression": "$1,200.00 + $2,880 + $360 = $4,440"
      },
      {
        "label": "Lifetime value",
        "expression": "$4,440 × 40% = $1,776.00"
      },
      {
        "label": "Payback",
        "expression": "$300.00 ÷ $480.00 = 0.6 jobs"
      }
    ]
  },
  "shareableExample": "https://soudcoh.com/tools/customer-lifetime-value-calculator?firstJob=1200&repeatPerYear=0.6&years=4",
  "faqs": [
    {
      "question": "What is a good LTV to CAC ratio?",
      "answer": "The commonly quoted 3:1 does not come from any dataset we could find. It appears on agency and software blogs without a source and has been repeated until it sounds established. We are not going to print it as a target. The ratio that matters is whether the payback period fits your cash position: a business recovering acquisition cost on the first job can grow spend quickly, and one waiting three years cannot, whatever the ratio says."
    },
    {
      "question": "Is there an average customer lifetime value for tradies?",
      "answer": "No primary source publishes one, for any trade, in any market. We went looking and found only assertions. That absence is why every input on this page is yours and why there is no benchmark row in the table — a made-up lifetime value is the single most dangerous invented number in marketing, because it is the one used to justify overspending."
    },
    {
      "question": "Should I use revenue or profit for lifetime value?",
      "answer": "Gross profit. A lifetime value in revenue looks impressive and cannot be spent on anything. This tool shows both, but the figure it puts in the headline is after your gross margin, because that is the money actually available to pay for acquiring the next customer."
    },
    {
      "question": "How do I work out my retention?",
      "answer": "Take every customer from a year far enough back that the pattern has played out, and count how many booked again, and how many times. Average across all of them, including the ones who never returned — averaging only over the repeaters is the mistake that turns a 0.4 into a 2.1 and inflates everything downstream."
    },
    {
      "question": "Does this change what I can afford to pay for a lead?",
      "answer": "Yes, if the repeat work is real. The break-even calculator gives you the ceiling on one job; this one gives you the ceiling across the relationship, and for a maintenance-style business the second is considerably higher. The catch is cash: you can only spend against future profit if you can fund the gap while it arrives."
    }
  ],
  "sources": [],
  "relatedTools": [
    "https://soudcoh.com/tools/break-even-roas-calculator",
    "https://soudcoh.com/tools/cost-per-booked-job-calculator",
    "https://soudcoh.com/tools/contract-churn-calculator"
  ],
  "licence": {
    "terms": "Free to reuse with attribution to SoudCoh and a link to the page it came from. Third-party figures remain the property of the publisher named on each row and must keep their market and year attached.",
    "attribution": "SoudCoh — https://soudcoh.com/tools"
  }
}