CLV / LTV Calculator
Customer lifetime value tells you what a customer is really worth — and therefore what you can afford to spend acquiring one and still come out ahead.
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How this is calculated
Revenue LTV = average order value × purchases per year × customer lifespan in years. Profit LTV applies your gross margin to that figure, since revenue isn’t what you actually keep.
Profit LTV is the more useful number for acquisition decisions: it’s roughly the ceiling on what you can spend to acquire a customer (via ads, discounts, or otherwise) and still be profitable over their lifetime — not just on their first order.
FAQ
Should I target break-even ROAS on the first order, or on lifetime value?
Many profitable Shopify stores accept a loss (or break-even) on a customer's first order because repeat purchases make them profitable over time. If that's your model, size your acquisition spend against profit LTV, not first-order margin alone.
How do I estimate customer lifespan if I'm a newer store?
Use a conservative estimate (1–2 years) until you have enough repeat-purchase history to calculate it from real cohort data. It's better to under-estimate LTV and be pleasantly surprised than over-spend on acquisition.
Does this account for acquisition cost?
No — this calculates what a customer is worth, not what they cost to acquire. Compare the Profit LTV result against your actual CAC (spend ÷ new customers) to see if the relationship is healthy.
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