Beauty business
Client lifetime value.
Enter an average ticket, how often a client visits, your margin and how many clients stay each year. See the lifetime profit of one client and whether acquiring them pays.
LTV = ticket x visits per year x margin x 1 / (1 - retention). An $80 ticket, 6 visits a year, 60% margin and 75% yearly retention is $288 profit a year over a 4-year average life: $1,152 per client.
Your numbers
Result
Worked example
A client spends $80 six times a year: $480 revenue. At a 60% margin that is $288 profit a year. If 75% of clients return each year, the average client stays 1 / (1 - 0.75) = 4 years, so lifetime value is $288 x 4 = $1,152 (24 visits). With $100 to win them, LTV to cost is 11.5 to 1 and the $100 is earned back after 3 visits ($48 profit a visit).
How it works
Expected lifetime in years = 1 / (1 - annual retention). This is the standard simple customer-lifetime formula (average life is the inverse of the yearly loss rate). It assumes a steady retention rate and ignores discounting and price rises.
LTV = profit per year x lifetime. Use profit margin, not revenue, so the number is money you keep. Retention is the share of clients who come back the next year, which you can count from your booking system.
Because small changes in retention swing lifetime a lot (80% gives 5 years, 90% gives 10), rebooking at checkout and reminders are often worth more than new-client ads. Retention is capped at 95% here because 100% never ends.
Sources and basis (checked 2026-10-05): Standard customer lifetime value formula: lifetime = 1 / churn, LTV = annual profit x lifetime. Arithmetic on your inputs.
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FAQ
How do I calculate client lifetime value for a salon?
Multiply ticket by visits per year and margin to get yearly profit per client, then multiply by expected lifetime, which is 1 divided by the share of clients you lose each year.
What is a good LTV to acquisition cost ratio?
Many businesses aim for at least 3 to 1. That is a common rule of thumb, not a standard, so use it as a guide and compare your own months.
How do I find my retention rate?
Take clients who visited last year and count how many visited again this year. Divide by last year's total.
Is a free first visit an acquisition cost?
Yes. Count the discount or free service as part of the cost to win the client.