Customer Lifetime Value Calculator

The numbers behind your pricing

Customer lifetime value (LTV) is the total profit a customer generates across the entire time they do business with you — not just the first job. It's the number that tells you what you can afford to spend to win a customer, and it's the single most underused metric in contracting. Most contractors set marketing budgets based on what they 'feel' they can spend; the ones who grow set them based on LTV.

The calculation multiplies average job value by gross margin to get profit per job, then multiplies by repeat frequency and relationship length to get total profit per customer. A $2,000 job at 40% margin is $800 profit. If that customer hires you twice a year for 5 years, their LTV is $8,000 — and that's before any referrals they send. Knowing that, you can confidently spend $800–$1,500 to acquire them and still profit handsomely.

The lever most contractors miss is relationship length. A one-time project trade (a roof, a remodel) has an LTV close to the single job profit. A recurring-service trade (HVAC maintenance, lawn, pest) compounds the same customer across years and often has an LTV several times the first job. This is why retention and follow-up matter more for service businesses than for project businesses — and why a 'we'll never hear from them again' mindset leaves enormous value on the table.

Pair LTV with the cost-per-lead calculator. If your cost per acquisition is $300 and your LTV is $6,000, you have a 20:1 return and should be pouring money into that channel. If CPA is $800 and LTV is $900, the channel is a loss and no volume fixes it. LTV is the denominator that makes every marketing decision rational instead of a guess.