LTV Calculator
Gross-Margin LTV equals AOV multiplied by purchase frequency × customer lifespan × gross margin %. Indian D2C beauty Gross Margin LTV bands sit between ₹1,500–₹6,000; subscription D2C reaches ₹3,000–₹15,000. Use Gross Margin LTV (not gross-revenue) when discussing acquisition spend with a CFO.
- Gross-Margin LTV = AOV × purchase frequency × lifespan × gross margin %.
- Pair with CAC; LTV/CAC ≥ 3 is the healthy threshold.
- Don't use gross-revenue LTV — it inflates 2-3× over honest gross-margin LTV.
Total orders ÷ unique customers per year
Inflates the picture
Gross-Margin LTV = AOV × Purchase Frequency × Customer Lifespan × Gross Margin %- AOV: net of refunds + COD adjustments.
- Purchase frequency: orders ÷ unique customers per year.
- Lifespan: how long the average customer stays active (cohort-derived).
- Gross margin: revenue minus COGS, divided by revenue.
Frequently asked questions
Why use gross-margin LTV instead of gross-revenue LTV?
Gross-revenue LTV ignores the cost to deliver the product. The number you'll spend acquiring customers comes from gross profit, not revenue. Using gross-revenue LTV inflates LTV/CAC 2-3× and breaks unit-economics decisions.
What's a typical lifespan for Indian D2C beauty?
1.5–2.5 years for repeat-purchase categories. Subscription D2C reaches 3–5 years for healthy retention. Cohort analysis is the best way to verify.
Should I include refund costs?
Yes — subtract refund costs from revenue when calculating AOV-net-of-refunds. Indian D2C refund rates of 5–12% are common.
How do I forecast lifespan if I'm pre-PMF?
Use cohort retention curves at 90 days as the leading indicator. If 30%+ of customers repeat at 90 days, lifespan typically lands at 2+ years. Below 15% repeat at 90 days, lifespan is structurally short.
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