How Much is a New Customer Worth to You?

We use four components: direct service revenue (ticket × frequency × lifespan), maintenance agreement revenue (including the documented 2:1 pull-through multiplier), probability-weighted equipment replacements, and a conservative 1-generation referral cascade. Customer lifespan is calculated from your retention rate using the standard formula: 1 ÷ (1 − retention rate).

Industry data from ServiceTrade and OxMaint shows that every dollar of maintenance agreement revenue generates approximately two dollars in additional repair and service work. Maintenance visits uncover issues — a $350 tune-up leads to a $700 repair. This is the most under-counted source of revenue in home services.

An LTV:CAC ratio of 3:1 is generally considered healthy — you get $3 back for every $1 spent acquiring a customer. Ratios of 5:1 or higher are strong. Many home services companies achieve 10:1 or better because customer lifetimes are long and acquisition costs are moderate. If your ratio is below 3:1, focus on improving retention and agreement attach rates before spending more on marketing.

The defaults are based on aggregated industry benchmarks from ServiceTitan, ACCA, PHCC, and trade association data. They represent averages — your actual numbers may be higher or lower depending on your market, service mix, and pricing. We recommend replacing the defaults with your own data for the most accurate result.

Retention has a compounding effect that most people underestimate. Going from 66% retention to 75% retention doesn't just add 9% — it extends average customer lifespan from 2.9 years to 4.0 years, a 38% increase. That extra lifespan compounds through more service calls, more agreement renewals, and more referral opportunities. A Bain & Company study found that a 5% increase in retention increases profits by 25-95%.

When a potential customer calls and you don't answer, 85% will never call back — they call your competitor instead. You don't just lose one job ticket. You lose the entire customer relationship: years of service calls, maintenance agreements, an eventual equipment replacement, and every referral they would have sent your way. That's why a missed $450 HVAC call actually costs $47,000+.