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Lifetime Gross Profit (LTGP) Calculator

Calculate the total gross profit generated by a customer over their entire relationship with your business.

Lifetime Gross Profit Calculator

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Average gross profit per customer per month

Average number of months a customer stays with your business

Calculate for multiple customers (defaults to 1)

Understanding Lifetime Gross Profit

Lifetime Gross Profit (LTGP) measures the total gross profit a business expects to generate from a customer over their entire relationship with the company. It helps businesses understand the long-term value of their customer relationships.

Formula:

LTGP = Gross Profit per Month × Customer Lifetime (months)

Why this metric matters:

  • Sets the upper limit on what you can spend to acquire a customer
  • Helps prioritize customer segments based on their long-term value
  • Demonstrates the impact of retention on business profitability
  • Guides resource allocation for acquisition vs. retention efforts
  • Provides context for evaluating customer acquisition costs

Note: This calculation assumes consistent monthly profit over the customer lifetime. For more sophisticated analysis, consider using discounted cash flow methods that account for the time value of money.

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