Customer LTV

Customer LTV shows each customer’s lifetime value: what they’ve spent with your store so far, plus a prediction of what they’ll spend from now on. The page adds it up across your customers, by the month they first ordered, and against what you spend on ads to win them.

The Customer LTV page, with summary cards for customers, average LTV, median LTV and unrealized sales, a chart of LTV by acquisition month, and a table of each month's cohort.

How It’s Calculated

A customer’s LTV is their total sales so far, plus a predicted amount:

Total sales so far: every order, after discounts and refunds, with shipping and tax.
Predicted amount: the customer’s average order value, times the median number of orders placed by customers in their loyalty group, times the years they have left.
Years left: the average time between first and last order across their loyalty group, minus the time since this customer’s last order. It’s never less than zero.

The average order value here is before refunds. Loyalty groups are the ones on Customer Loyalty, such as Best, At risk and Dormant.

A customer whose last order is further back than their group’s average lifetime gets no predicted amount. Their LTV is what they’ve already spent.

With the standard cutoffs, the Recent and Defecting groups hold only customers with 1 order. Their average lifetime is a single day, so their LTV is, in practice, what they’ve spent.

Orders that were canceled, or whose payment was voided or expired, don’t count. Only customers with at least one order are on this page. LTV is worked out when your customer data is rebuilt: see How Often Is My Data Updated?.

The Summary Cards

These four cards cover every customer who has ordered, whatever the date range:

Customers: customers with at least one order.
Avg LTV: their average LTV.
Median LTV: the LTV of the customer in the middle, with half above and half below.
Unrealized Sales: the predicted amounts added together. It’s the part of LTV your customers haven’t spent yet.

The Cards Below

LTV by Acquisition Cohort groups customers by the month of their first order, for the months in your date range. The chart shows each month’s Avg LTV. The table adds Total Sales, Total LTV, Unrealized Sales, Avg Lifespan (d), AOV and Purchase Frequency.
LTV Distribution splits customers into 10 bands by LTV percentile. Each bar is that band’s share of the LTV of all your customers. Customers with the same LTV share a percentile, so bands can differ in size.
Blended CAC vs LTV divides your ad spend in the date range by the customers whose first order was in it. That’s Blended CAC. LTV : CAC Ratio is those customers’ Avg LTV divided by it.
Payback Period by Cohort follows each month’s new customers for up to 12 months after the month they first ordered. It plots what they’ve spent per customer, net of refunds, against that month’s ad spend per new customer. Payback Month is the first month their spending covers it. It reads Month 0 for the month they first ordered, Month 1 for the next, and so on.
Top Customers by LTV lists your 100 customers with the highest LTV.

Blended CAC counts all your ad spend, so customers who found you without an ad bring it down. Without a connected ad platform, the card asks you to connect one. With no ad spend in the date range, the CAC figures show “—”.

With das Pixel installed, What Each Platform’s Customers Are Worth also appears. It groups new customers by the paid ad click das Pixel saw before their first order. It shows their average value 60, 90 and 365 days after that first order.

What Good Looks Like

The badge on Blended CAC vs LTV grades the ratio:

Healthy: 3 or more. On average, a new customer is expected to bring in at least 3 times what it cost to win them.
Watch: from 1.5 up to 3.
Underwater: under 1.5.

On Payback Period by Cohort, an earlier Payback Month is better. Not yet means that month’s customers haven’t covered its spend per new customer within the months shown.

When Avg LTV is far above Median LTV, a small group of customers is pulling the average up. The last bars on LTV Distribution show how much of your customers’ value sits with them.

LTV is a prediction built from averages, so treat it as a guide. Compare your store with itself over time, not with other stores.

What to Do About It

Look after your top customers. The Top 25th Percentile Customers by LTV and Top 10th Percentile Customers by LTV segments on Customer Segments hold them. Sync one to your email platform for early access or a thank-you.
Find the customers with most still to spend. The Top 25th Percentile Customers by Unrealized Sales segment holds customers with the biggest predicted amounts.
A falling ratio: each new customer is costing more, or is worth less. With das Pixel installed, What Each Platform’s Customers Are Worth shows which platforms win customers who buy again.
A late or missing payback month: work on the second order, since each repeat order moves the cohort’s line up. Cohort Repurchase Rate shows when customers come back.

To group customers by LTV yourself, use the Lifetime value (LTV) or LTV percentile rule in a custom segment: see How to Create a Custom Segment.

Where to Find It

Customer LTV: LTV in the navigation, under Customers.
The date range at the top sets which cohorts appear on the cohort, CAC and payback cards, and on What Each Platform’s Customers Are Worth. It starts at Trailing 1 year.
A segment’s page shows its customers’ Avg LTV and Unrealized Sales.