#1029 · E-commerce Tool

Shopify LTV Calculator

Estimate Shopify customer lifetime value from order value, purchase frequency, customer lifetime, margin, and CAC. Use it to set marketing budget limits.

Calculator

Customer value inputs
$
orders
years
%
Ad space

How to use this calculator

  • Enter average order value.
  • Enter repeat purchase frequency per year.
  • Enter expected customer lifetime in years.
  • Enter gross margin percentage to calculate profit-based LTV.

What the result means

Higher LTV allows more room for acquisition spending, retention programs, loyalty incentives, and customer support without losing profitability.

LTV = AOV × Purchases per Year × Customer Lifetime × Gross Margin.

Profit-based LTV is more useful than revenue-based LTV because it reflects the value available to cover CAC and overhead.

Example calculation

With $70 AOV, 4 purchases per year, 2.5 years lifetime, and 45% margin, LTV is $315.

Tips for better results

  • Increase repeat purchase frequency with email flows.
  • Use subscriptions or loyalty programs when suitable.
  • Segment LTV by channel.
  • Do not overpay for low-retention customers.

FAQ

What is a good Shopify LTV?

A good LTV is high enough to support CAC, overhead, and profit. Many stores judge it by LTV:CAC rather than an absolute number.

How do I calculate Shopify customer lifetime value?

Multiply average order value by purchase frequency, customer lifetime, and gross margin to estimate profit-based customer value.

How can I increase customer lifetime value on Shopify?

Increase repeat purchases, improve retention, build loyalty programs, add subscriptions, cross-sell related products, and improve post-purchase email flows.

Should Shopify LTV include gross margin?

Yes. Profit-based LTV is better for marketing decisions because revenue does not show how much value remains after cost of goods.

What is the ideal LTV:CAC ratio for Shopify?

Many ecommerce operators target at least 3:1, meaning lifetime gross profit is three times acquisition cost.

Shopify LTV Metrics

MetricUse
LTVExpected gross profit per customer.
Annual ValueYearly customer profit contribution.
Lifetime OrdersExpected number of orders per customer.

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