The CLV Formula for Non-Contract SaaS
Calculating lifetime value is easy with contracts, hard without them. We show you the math.
By TrackRaptor DevData Scientist
READ: 12 min read
To calculate CLV in a month-to-month SaaS, you must first determine your Churn Rate. Without a fixed contract end-date, the 'Lifetime' part of CLV is an estimate based on historical behavior.
The Math
CLV = Average Revenue Per User (ARPU) / Monthly User Churn Rate. If your ARPU is $50 and your churn is 5%, your CLV is $1,000.