Churn & LTV (lifetime value) Estimator


                    

            

              

                

                  

                    
                      
                    
                  

                

                

                  
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Churn & LTV estimator helps you forecast customer value from a few simple inputs. If you run a subscription or SaaS, you need a quick sense of how much a customer is worth - and how long they stay. The free Churn & LTV Estimator by FlexiTools.io shows average lifespan, 12-month retention, and lifetime value in seconds. In the next 60 seconds, you will enter ARPU, churn, margin, and an optional discount rate to get a clear LTV and a simple LTV:CAC check.


How to Use Our Churn & LTV Estimator


    

  1. Enter ARPU per month, monthly churn percent, and gross margin percent.
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  2. Add a monthly discount rate if you want a present-value estimate.
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  3. Enter CAC to see the LTV:CAC ratio, or leave it blank.
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  4. Click Estimate, then copy or export the results.
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Why FlexiTools.io Offers the Best Churn & LTV Estimator


Fast, simple modeling


One screen, a few fields, instant math. No clutter or hidden steps.


Transparent formulas


We show both a simple LTV and a discounted LTV so you can compare.


Private and exportable


All math runs locally. Copy or export a CSV for your deck in one click.


Comparison - FlexiTools.io vs typical alternatives:


    

  • FlexiTools.io: Client-side, clear ranges, CSV export, no sign-in.
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  • Typical alternatives: Aggressive gating, unclear formulas, limited export.
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A Deeper Look at churn, retention, and LTV


The moving parts


Monthly churn is the percent of active customers who cancel in a month. If churn is 3%, average lifespan is 1/0.03 ≈ 33.3 months in a simple geometric model. Retention after t months is roughly (1 - churn)^t. At 3% churn, 12-month retention is about 69.7%. These rules of thumb make quick planning possible.


ARPU is average revenue per user per month. Gross margin scales that revenue into contribution - the portion that can pay for acquisition, product, and profit. Multiply ARPU by gross margin to get monthly margin per account. LTV then adds time: how many months of margin should you expect from one customer?


The simple formula used in many teams is LTV = ARPU × gross margin ÷ churn. It assumes stable churn and no discounting. As a first pass, it works well to compare markets or plans. If you want to account for time value of money, you can apply a monthly discount rate. A common shortcut is LTV ≈ ARPU × gross margin ÷ (churn + discount). It is a clean approximation of an infinite discounted series.


What the ratio means


If you add CAC, you can see LTV:CAC. A ratio above 3:1 is often cited as healthy for SaaS, but context matters. Sales cycles, payback time, and cash needs vary by stage. A 2:1 ratio can be fine if you have strong upsell or very short payback. Use the ratio as a guide, not a hard rule.


Sensitivity matters


Small changes in churn move LTV a lot. Moving from 3% churn to 2% churn increases lifespan from 33.3 to 50 months. That adds 50% more months of margin. If you run tests, track churn cohorts by signup month to see whether retention improves. ARPU increases also help, but watch for side effects. Price increases can raise ARPU while raising churn. Always check both sides.


Example


A product with $25 ARPU, 80% gross margin, and 3% churn has monthly margin of $20. LTV (simple) is $20 / 0.03 ≈ $666.67. With a 0.8% monthly discount, LTV is about $20 / 0.038 ≈ $526.32. If CAC is $120, the LTV:CAC ratio is 4.39:1 using the discounted figure. That leaves room for paid channels and partner fees.


More reading


    

  • Investopedia’s overview of Customer Lifetime Value explains common inputs and formulas.
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  • For writing clear assumptions in docs, the PlainLanguage.gov guidance can help your team avoid confusion.
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Editorial note: Calculations were assisted by AI and reviewed by a human editor. For finance-sensitive decisions, verify with your analyst or accountant.


Pro-Tips for Getting the Most Out of Retention and LTV


    

  • Model by plan. Churn and ARPU often differ across tiers. Run the estimator per plan and weight by mix.
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  • Track payback time. Many teams target CAC payback under 12 months even if LTV:CAC is strong.
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  • Update monthly. As churn shifts, your LTV moves fast. Small changes drive big strategy shifts.
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                    Is churn monthly or annual here?                    
                  
                  
It is monthly. If you only know annual churn, convert it to monthly using an approximate rate. For example, 30% annual churn is about 3% monthly, though real cohorts vary.

                

                                                              

                  
                    Why include gross margin in LTV?                    
                  
                  
LTV should reflect contribution, not top-line revenue. Gross margin accounts for cost of goods and delivery, leaving dollars that can pay back CAC and profit.

                

                                                              

                  
                    Do I need a discount rate?                    
                  
                  
Not always. The simple formula is common for planning. A discount rate gives a present-value view, which is helpful for long lifespans or higher cost of capital.

                

                                                              

                  
                    How accurate is the (churn + discount) shortcut?                    
                  
                  
It is a clean approximation for a geometric series with discounting. If you have complex retention curves, you may prefer a cohort model in a spreadsheet.

                

                                                              

                  
                    What LTV:CAC ratio is healthy?                    
                  
                  
Many point to 3:1 as a good target. Context matters. Short payback and strong retention can justify a lower ratio. High risk or long cycles may need more buffer.