Multiply an order by its frequency into a year
Average order value times the orders a month, times twelve, is what one customer spends in a year: a $45 basket bought one and a half times a month comes to $810. The page prints that annual figure as its own row in the table, between the orders over the lifetime and the lifetime revenue, so the middle step can be checked without redoing the multiplication.
Frequency is the input most easily underestimated, because it decides how many times the same basket is counted. A customer who buys once a quarter is 0.33 orders a month, not 1; entering 1 for a quarterly buyer triples the annual revenue before any other field is touched.
Extend that across the relationship
Annual revenue times the years the customer stays is lifetime revenue. The same $810 a year for three years is $2,430 - revenue, not profit, and still before the margin is applied.
The years field means the whole relationship, not one season, one contract term or one subscription cycle; entering three years for a customer who leaves in eighteen months doubles the answer. Because the step is a plain multiplication, doubling the lifetime doubles lifetime value, and the orders-over-the-lifetime statistic in the hero shows the same assumption counted in orders instead of years.
There is no churn curve between the two lines: every year is priced as if it arrives. A real forecast would shrink each later year by the probability of the customer still being there, which is the first thing to add outside this page.
Gross margin turns revenue into contribution
Only the margin belongs to the business. At 40%, $2,430 of lifetime revenue leaves $972 of contribution, and that is the number an acquisition cost should be compared against - not the revenue figure, which still contains the product cost.
The margin is gross, meaning sale price minus product cost, so rent, payroll, tools and every other fixed cost still have to come out of the contribution before it becomes profit. Drop the margin to 30% and the same customer is worth $729; revenue has not moved at all, which is why a thin-margin customer can be worth less than a smaller, richer one.
The hero prints contribution as the headline and revenue as a stat beside it, so the two views stay distinct instead of blurring into one flattering number.
The model says its own limits
No churn, no discounting, and a stable order value and margin for the whole lifetime: those are the assumptions, and the page lists them where a rate page would list a source. A lifetime-value model used for planning would weight each year by the chance the customer is still there and discount future cash, and both of those lower the answer.
Read the result as the shape of a customer, not a forecast of next year’s ledger. The companion acquisition-cost page prices what it takes to earn one customer; this page prices what that customer returns, and the working rule is that the second comfortably exceeds the first.
Extreme entries are clipped rather than allowed to produce nonsense: orders per month stop at 100,000, the lifetime stops at 100 years, and money figures saturate at the site’s shared ceiling instead of running past it.
Two levers, and only one of them is free
Order value and lifetime both multiply the answer, so doubling either doubles contribution. At the defaults, three years of $45 orders is $2,430 of revenue and $972 of contribution; six years is $1,944. Retention does that without touching price, which is why it is the lever worth measuring rather than assuming.
Doubling the order value while halving how often the customer buys leaves the contribution at $972 - the two cancel exactly, and real customers rarely move one without the other. A price rise that thins repeat buying can undo itself, so run both edits and compare them against the acquisition cost before choosing a lever.
Danfio