Customer LTV: How to Calculate It and Make It Bigger

LTV (Lifetime Value) is what each customer is worth to your business over their entire relationship. It's the most important number in ecom, and the most poorly-calculated.

Let's fix that.

TL;DR

LTV = average revenue per customer over X period.

Calculate windows: 30, 60, 90, 180, 365 days.

What's good: LTV/CAC ratio of 3+.

Levers: repeat purchase rate, AOV, retention.

Most stores under-measure LTV because they only count first 30 days.

Calculating LTV

Simple formula (any time window)

LTV = Total revenue from cohort / Number of customers in cohort

For example:

100 customers acquired in March.

Their total spend by end of June (90 days): ₱150,000.

90-day LTV = ₱150,000 / 100 = ₱1,500.

Cohort-based LTV

Track each customer cohort separately:

January cohort 90-day LTV.

February cohort 90-day LTV.

Etc.

Look at trends. Is each new cohort's LTV growing or shrinking?

Channel-attributed LTV

Calculate LTV by acquisition channel:

Customers acquired via Meta: ₱1,800 90-day LTV.

Customers acquired via Google: ₱2,200.

Customers acquired via SEO: ₱2,800.

Often higher LTV from organic. Adjust marketing investment accordingly.

Time windows that matter

Most ecom stores should track:

Day 1: first-order revenue.

Day 30: most repeat-purchase customers have made their second purchase.

Day 90: gives a real read on retention.

Day 180: stable LTV indicator.

Day 365: long-term value.

If you only track Day 1 (first-order revenue), you're underestimating LTV by 30–60%.

What's good?

Benchmarks for PH ecom:

| Category | Day 90 LTV (typical) |

|---------|---------------------|

| Skincare | ₱1,500–₱4,000 |

| Fashion | ₱1,200–₱3,500 |

| Home/kitchen | ₱1,000–₱3,500 |

| Supplements | ₱2,500–₱8,000 |

| Food/snacks | ₱1,000–₱4,000 |

| Subscription | ₱4,000–₱20,000+ |

Subscription products have the highest LTV by far.

LTV/CAC ratio

The single most important business number.

LTV: ₱2,000 (90-day).

CAC: ₱600.

Ratio: 3.3.

Healthy ratios:

Below 1: losing money.

1–2: marginal.

2–3: healthy.

3+: excellent. Push spend.

How to grow LTV

1. Increase repeat purchase rate

The biggest LTV lever.

How:

Klaviyo post-purchase flow with cross-sell.

Subscription option for replenishable products.

Loyalty program.

Replenishment reminders.

A 1% increase in repeat purchase rate often doubles LTV over 12 months.

2. Increase AOV

Higher first-order value compounds.

How:

Bundles.

Upsells.

Free shipping threshold.

Cross-sells.

See Shopify Upsells and Cross-Sells.

3. Increase retention period

Keep customers active longer.

How:

Email and SMS engagement.

New product launches communicated to customers.

VIP / loyalty perks.

Quality customer service.

4. Reduce churn

Particularly for subscriptions.

How:

Pre-charge notifications.

Easy skip / pause.

Exit-intent saves.

Cancellation save flows.

5. Acquire higher-LTV customers

Different acquisition channels yield different LTV.

How:

Bid more on channels with high-LTV cohorts.

Use customer data to build lookalike audiences from your top 25% LTV customers.

Target audiences likely to repeat.

LTV cohort analysis (advanced)

Track each cohort across time:

| Acquisition month | Day 30 LTV | Day 60 | Day 90 | Day 180 |

|-------------------|-----------|--------|--------|---------|

| January | ₱850 | ₱1,200 | ₱1,500 | ₱1,950 |

| February | ₱890 | ₱1,250 | ₱1,580 | ₱2,050 |

| March | ₱950 | ₱1,300 | ₱1,650 | (pending) |

Each cohort improving = your retention is getting better. Each cohort declining = something in the experience is degrading.

Tools

Shopify reports

Reports → Customers → Returning customer rate.

Shopify shows basic cohort analysis.

Triple Whale or Northbeam

Pulls Shopify + Meta + Google + Klaviyo data.

Calculates LTV by channel automatically.

Cost: $200–$500/mo.

Klaviyo CDP

Builds custom LTV segments.

Powers segmentation for high-LTV-targeted campaigns.

Custom (Looker Studio)

Pull data via Shopify API.

Build LTV dashboards.

Free, but requires technical setup.

What kills LTV

1. Bad first experience: 1 in 4 customers who have a bad first delivery never buy again.

2. Aggressive discounting: trains customers to wait for sales, lowers AOV.

3. No follow-up email: customer makes one purchase, never hears from you, churns.

4. Poor product quality: returns and refunds destroy LTV.

5. Weak customer service: a bad ticket experience tells the customer "they don't care."

Action plan to improve LTV

Month 1

Implement post-purchase email flow (3–4 emails).

Add review request emails.

Set up replenishment reminders for consumables.

Month 2

Launch a basic loyalty program (Smile.io or similar).

Add subscription option to top 5 SKUs.

Audit and improve customer service response time.

Month 3

Cohort analysis: identify which cohorts declined and why.

A/B test post-purchase upsell.

Build VIP segment in Klaviyo for top customers.

Track Day 90 LTV monthly. Aim for steady improvement.

Want help growing LTV?

LTV optimization compounds. My Shopify Expert service covers retention strategy. Or learn it in the Shopify Course Philippines.

Related reading:

Shopify Subscriptions: Complete Setup Guide

Shopify Email Flows That Print Money

E-commerce KPIs That Actually Matter