A skincare store has a $58 AOV, customers buy 3.2 times a year, and stay 2.5 years. That is $464 of lifetime revenue. At a 62% margin, CLV profit is $288, so you can afford a CAC up to roughly $96 and still triple your money.
LTV calculator
Calculate your Customer Lifetime Value (LTV) to understand true customer profitability. Our free e-commerce tool helps you make smarter marketing, advertising, and customer retention decisions.
5/5 on ShopifyTrusted by 500+ brands
Example and tips
- Use a 12-month CLV, not a lifetime guess. Recent buyers give you a reliable cohort instead of optimistic math.
- A healthy store keeps a CLV-to-CAC ratio of 3:1 or higher. Below 2:1, growth quietly burns cash.
- Lift CLV before chasing new traffic: a post-purchase WhatsApp flow adds one repeat order and moves CLV more than ads.
Kanal
What is Kanal?
Kanal turns WhatsApp into a sales channel for Shopify stores: abandoned cart recovery, order updates, campaigns to your segments, an AI chatbot and a shared inbox, with revenue tracked per message.
+90%open rate5/5on the Shopify App StoreFrom €89per month
See WhatsApp for Shopify in detailAbandoned cart flowFincut · WhatsAppLive
- Checkout abandonedTech T-shirt · Black, M
- Wait 1 hourSmart delay, quiet hours respected
- WhatsApp reminderProduct photo · 2 buttons
- Customer replyAnswered by the AI agent
- Order recovered#1042 · Paid in Shopify
Recovered this month€12,445.20
Your Shopify store on WhatsApp in 15 minutes
Leave your email and store address: a Kanal expert shows you the WhatsApp flows that pay for your catalog, cart recovery, order updates and campaigns.
How it works
Calculate your Customer Lifetime Value (LTV) to understand true customer profitability. Our free e-commerce tool helps you make smarter marketing, advertising, and customer retention decisions.
- 1
1) Provide your customer metrics
Input your store's key averages: Average Order Value (AOV), the number of purchases a customer makes per year, and your gross profit margin.
- 2
2) Define the customer lifespan
Enter the average number of years a customer typically stays with your brand. This is a crucial factor in determining long-term value.
- 3
3) Calculate your total customer profit
Get an instant calculation of your profit-based Customer Lifetime Value (LTV), helping you make smarter decisions on ad spend and retention efforts.
Frequently asked questions
What is Customer Lifetime Value (LTV)?
Customer Lifetime Value (LTV) is a metric that estimates the total net profit your business will earn from an average customer over the entire course of their relationship with your brand. It tells you how much a customer is truly worth to you after accounting for costs.
How do I use this calculator?
Enter four key metrics from your store's analytics: - Average Order Value (AOV): The average amount a customer spends in a single transaction. - Purchase Frequency: The average number of times a customer makes a purchase from you in one year. - Customer Lifespan: The average number of years a customer continues to buy from you. - Gross Profit Margin: The percentage of revenue that is left after subtracting the Cost of Goods Sold (COGS).
Why is LTV so important for my e-commerce store?
LTV is one of the most critical metrics for sustainable growth. It helps you: - Make Smart Ad Spend Decisions: Your LTV tells you the maximum you can afford to spend to acquire a new customer (your Customer Acquisition Cost, or CAC) and still be profitable. - Focus on Retention: It highlights the immense value of keeping existing customers happy and encouraging repeat purchases. - Identify Your Best Customers: You can segment customers by LTV to identify your most valuable audience and tailor marketing efforts to them.
How can I improve my store's LTV?
To increase your LTV, you need to improve one of the core inputs: - Increase Average Order Value: Use strategies like product bundling, upsells, and free shipping thresholds. - Increase Purchase Frequency: Implement email marketing, loyalty programs, and retargeting campaigns to encourage repeat business. - Increase Customer Lifespan: Focus on excellent customer service, build a strong brand community, and create a memorable customer experience.
Is this a simple or complex LTV model?
This calculator uses a foundational and widely accepted model for estimating LTV, which is perfect for most e-commerce businesses to get a strong directional understanding of their customer value. More advanced models exist (e.g., cohort analysis), but this tool provides the essential insights needed for strategic decision-making.