Key takeaways
- Shopify LTV calculator — focus on one metric or lever at a time; validate with data before scaling spend.
- Pair reading with free Growthegy calculators (LTV, ROAS, break-even, pricing) to turn ideas into numbers.
- Bookmark growthegy.com/tools/ and run the Business Strategy Quiz when you need a prioritised roadmap.
LTV on Shopify
Shopify LTV uses the same LTV = AOV × frequency × lifespan × margin % formula—use a margin net of Shopify Payments and critical apps.
Customer Lifetime Value (LTV) Calculator
Calculate your customer lifetime value to understand how much each customer is worth over their entire relationship with your business. Use this to make informed decisions about marketing spend, customer acquisition, and retention strategies.
Customer Metrics
Average amount a customer spends per order
How many times a customer purchases per year (e.g., 2.5 = every 4.8 months)
Average number of years a customer stays active
Profit margin after cost of goods sold (COGS)
Total marketing and sales cost to acquire one customer
LTV Analysis
Total Customer Value$375.00
Before margin (AOV × Frequency × Lifespan)Customer Lifetime Value (LTV)$225.00
Net profit per customer over their lifetimeLTV:CAC Ratio7.50x
Excellent - Healthy ratio
Payback Period3.2 months
Time to recover CAC from customer profitsAdditional Insights
Monthly Revenue per Customer$9.38
Annual Revenue per Customer$112.50
Retention Value$112.50
Value of retaining one customer for another yearUnderstanding Your LTV Results
LTV:CAC Ratio Benchmarks
- 3:1 or higher: Excellent - You can afford to invest more in customer acquisition
- 2:1 to 3:1: Good - Sustainable for long-term growth
- 1:1 to 2:1: Fair - Monitor closely, focus on improving retention or reducing CAC
- Below 1:1: Poor - You're losing money on each customer
How to Improve Your LTV
- Increase AOV: Upsells, cross-sells, product bundles, minimum order thresholds
- Increase Purchase Frequency: Email marketing, loyalty programs, subscription models, reorder reminders
- Extend Customer Lifespan: Better customer service, retention campaigns, win-back programs
- Improve Gross Margin: Optimize pricing, reduce COGS, negotiate better supplier terms
FAQ
- Is Shopify LTV different?
- The LTV formula is the same. Shopify-specific costs (apps, transaction fees) affect net margin inside the model.