What one customer is worth over the years
Add the gross profit from the first job, from repeat jobs each year, from any maintenance plan and from referrals, then multiply the yearly parts by the years a customer stays.
Customer lifetime value
firmkit.co/tools/customer-lifetime-value-calculator/ · Oct 19, 2026
Example numbers, not yours.
Your calculation, step by step
- $650 x 45%first job revenue times margin = $293
- 1 x $400 x 45%repeat jobs a year = $180 a year
- 20% x $240 x 60%plan take rate times price times plan margin = $29 a year
- 0.3 x 40% x $293referrals a year that close, each worth one first job = $35 a year
- x 5 yearsevery yearly line is multiplied by years kept
- = $1,512per customer, over the years kept
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Your lifetime gross profit with and without a plan stays free above. Email adds a year-by-year plan comparison, the most you can spend to win a customer at your target ratio, and a printable copy.
- A year-by-year table, with and without a plan
- The most you can spend to win a customer at your target ratio
- A printable copy for your partner or CPA
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Your table and printable plan
This report uses the example numbers.
Try a different target ratio for the spending line. Leave it blank to use the one above.
A planning aid, not accounting or legal advice.
Made with firmkit.co/tools/customer-lifetime-value-calculator/. A planning aid, not accounting or legal advice.
How the numbers are worked out
The formula, in words
First job profit = first job revenue x gross margin
Repeat profit a year = repeat jobs x average repeat revenue x gross margin
Plan profit a year = plan price x plan margin. In the blended figure it is multiplied by the share of customers on a plan
Referral profit = years x referrals a year x the share that become a job x first job profit. One level only
Lifetime gross profit = first job + years x (repeat + plan + referral parts). Most to spend = lifetime profit / your target ratio
Everything is gross profit, so you compare it with what you spend to win a customer, not with revenue. Later years are not discounted, so a dollar in year five counts the same as a dollar today. That overstates value a little.
What the tool cannot know
- Customers who leave sooner or later than your average.
- Price changes over the years.
- Referrals that come from referred customers, which this does not count.
- Seasonality and the cost of serving a plan customer, beyond the plan margin you enter.
Every assumption, and who set it
| Assumption | Value | Set by |
|---|---|---|
| Margins, jobs and prices | Your numbers | You |
| Years a customer stays | 5 as an example | You, from your own records |
| Plan share | 20% as an example | You |
| Referral rate | 0.3 a year, 40% close as an example | You |
| Target ratio | 3 to 1 to start | You edit it |
Sources
- No outside statistic is used. The 3 to 1 target is a starting point. Trades differ, so edit it. A planning aid, not accounting or legal advice.
Source check
- Outside statistics. None used on this page
Questions people ask
How do I work out customer lifetime value?
Add up gross profit from the first job, repeat jobs, any maintenance plan and referrals, then multiply the yearly parts by how long they stay. Use gross profit, not revenue, so the number is comparable with what you spend to win the customer. Use your own records for every input.
Is a maintenance plan worth it?
It can be, if the plan margin is positive and customers stay on it. A plan adds steady yearly profit and often a reason for the customer to call you first. This tool shows lifetime profit with and without a plan. The answer depends on your plan price, margin and how many customers join.
What is a good lifetime value to cost ratio?
A common rule of thumb from software is 3 to 1: lifetime gross profit three times what it costs to win the customer. Trades differ, because cost and customer life differ. Treat it as a starting line and edit it. A ratio below 1 means each customer loses money.
How long do customers stay?
It depends on your trade and your service. Look at your own records: how many customers booked again in each of the last few years. Use that, not a guess. If you have no history, start with a low number of years and update the tool as you learn.
Do referrals count toward lifetime value?
Yes, in this tool. A happy customer who sends you leads has real value. We count one level only: each referral that becomes a job is valued at one first job, and we ignore their own referrals. That keeps the number conservative. Set referrals to zero if you cannot track them.
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