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How To Calculate Shopify LTV (Customer Lifetime Value)?

By Irene LeJanuary 5, 20259 min read
How To Calculate Shopify LTV (Customer Lifetime Value)?
  1. Optimizing Marketing Spend: Knowing how much a customer is worth allows you to invest wisely in customer acquisition. If your LTV is significantly higher than your customer acquisition cost (CAC), your business is on a sustainable path.
  2. Boosting Customer Retention: Identifying high-value customers enables you to create strategies that improve their experience, leading to repeat purchases and long-term loyalty.
  3. Increasing Profit Margins: By focusing on customers who generate more revenue over time, you can optimize your pricing, upsell strategies, and product offerings to maximize revenue.
  4. Enhancing Business Forecasting: A well-calculated LTV provides better insight into business growth and helps in long-term financial planning.
  1. Log in to your Shopify Admin.
  2. Navigate to Analytics > Reports.
  3. Under Sales Reports, find Average Order Value (AOV).
  4. Note this number, as it will be used in the LTV formula.
  1. Go to Analytics > Customer Reports.
  2. Open Customers Over Time to see how often customers return
  3. Use this formula: PF = Total Orders ÷ Total Unique Customers
  1. Check historical data on repeat customers.
  2. If unsure, use an industry benchmark (1–3 years for eCommerce).
  • AOV = $50
  • PF = 3 purchases per year
  • CL = 2 years
  • LTV = $50 × 3 × 2 = $300
  • You get access to real-time reports rather than outdated data in spreadsheets (or your mental math)
  • You can enhance your customer acquisition and retention strategies by tracking LTV:CAC ratio.
  • Forecast future revenue growth to smartly allocate your marketing budget.
  • Points
  • Gift cards
  • Exclusive discounts
  • Cashback
  • Early access
  • Free swag
  • Open to customer feedback which can be used to improve the experience later.
  • Collect and use Zero-Party data to customize experiences and provide personalized recommendations and offers.
  • Offering quick and easy assistance 
  • Assessing performance and adapting to see if your customer experience is good or needs any improvement.
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Irene Le

Content Manager at TrueProfit & eCommerce Marketing Specialist

Irene Le is the Content Manager at TrueProfit, specializing in crafting insightful, data-driven content to help eCommerce merchants scale profitably. With over 5 years of experience in content creation and growth strategy for the eCommerce industry, she is dedicated to producing high-value, actionable content that empowers merchants to make informed financial decisions.

avatarIrene Le

Irene Le is the Content Manager at TrueProfit, specializing in crafting insightful, data-driven content to help eCommerce merchants scale profitably. With over 5 years of experience in content creation and growth strategy for the eCommerce industry, she is dedicated to producing high-value, actionable content that empowers merchants to make informed financial decisions.

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