Customer Lifetime Value
Calculate how much revenue a customer generates over their lifetime. Optimize acquisition spending and retention strategies.
Customer Metrics
How many times a customer orders per year
Average years a customer stays active
Optional: Advanced Metrics
Enter your customer metrics to calculate LTV.
Understanding Customer Lifetime Value
The CLV Formula
CLV = Average Order Value x Purchase Frequency x Customer Lifespan. This gives you total revenue, multiply by margin for profit-based CLV.
LTV:CAC Ratio
A 3:1 ratio is considered healthy - you earn $3 for every $1 spent acquiring customers. Below 2:1 suggests unsustainable acquisition costs.
Increasing CLV
Focus on: increasing AOV (bundles, upsells), improving purchase frequency (subscriptions, email), and extending lifespan (retention, loyalty programs).
Where to Find Data
Check Shopify Analytics for AOV and purchase frequency. Customer lifespan is harder - estimate from cohort analysis or use 2-3 years as a starting point.