Client Lifetime Value & Marketing ROI Calculator

Take your average profit per project (fee times the margin you keep after the cost of delivering it), multiply by the number of projects a typical client does with you over the relationship, then add the value of the new clients they refer. A client who pays a single fee looks small; the same client across a repeat project and one good referral is often worth three to five times as much.

Multiply the lifetime profit of a client by the odds an inquiry becomes one. If a lead has a 40% chance of a consult and a consult a 35% chance of signing, roughly one in seven inquiries becomes a client, so an inquiry is worth about one-seventh of a client's lifetime profit. That number is the ceiling on what you can rationally spend to earn one.

Established studios commonly reinvest 5-10% of revenue in marketing, and studios in a deliberate growth phase 10-15% or more. The sharper way to set the number is bottom-up: decide how many new clients you want, divide by your close rate to get the inquiries you need, and multiply by what you can afford to pay for each, a fraction of client lifetime value.

Lifetime value to customer acquisition cost of about 3:1 or better is the common benchmark for a healthy service business: you earn at least three dollars of lifetime profit for every dollar spent winning the client. Below 1:1 you lose money on every client; far above 5:1 usually means you are under-investing and leaving growth on the table.

Because it changes what you can afford. A studio that only counts the first fee is afraid to spend on marketing; a studio that counts the repeat work and referrals a good client brings can confidently out-invest competitors to win that client, and still profit. Lifetime value is the number that turns marketing from a cost into an investment with a known return.