1
Pull average order value (AOV) from your dashboard
Open Shopify Analytics or your payment processor and copy your trailing 90-day average order value. This is the amount the average customer spends per purchase.
Free Customer Lifetime Value Calculator
Calculate ecommerce LTV, LTV:CAC ratio, and CAC payback
A customer lifetime value calculator estimates the total gross profit a typical customer will generate over their entire relationship with your store. Enter average order value, purchase frequency, retention, and margin to see your LTV and payback period in seconds.
LTV calculatorLTV:CAC ratioCAC payback periodShopify LTV formula
Numbers from Shopify or Stripe paste right in. Explore the main Vibe Mart product.
Calculate your customer LTV
Choose how you want to express customer longevity. Numbers update as you type. CAC is optional - leave it 0 to skip ratio and payback.
LTV formulas
LTV = AOV x Purchase Frequency x Lifespan x Gross Margin %
Lifespan = 1 / (1 - Retention Rate)
LTV:CAC Ratio = LTV / CAC
Payback (months) = CAC / (Monthly Gross Profit per Customer)
5-year cumulative LTV projection
Projected gross profit per customer at the end of each year. In retention mode the calculator applies retention decay so later years contribute less.
| Year | Cumulative gross profit per customer | % of net LTV |
|---|---|---|
| Year 1 | $112.50 | 40% |
| Year 2 | $180.00 | 64% |
| Year 3 | $220.50 | 78% |
| Year 4 | $244.80 | 87% |
| Year 5 | $259.38 | 92% |
How to use this LTV calculator
2
Enter purchase frequency
Type how many orders the average customer places per year. Most ecommerce stores fall between 1.2 and 3.5 orders per customer per year.
3
Set retention rate or customer lifespan
Use retention rate if you have cohort data (e.g. 60% repeat next year), or customer lifespan if you prefer years. Switch modes with the toggle.
4
Add your gross margin and CAC
Enter gross margin percentage (after COGS, before fixed costs) and your customer acquisition cost. CAC is optional but unlocks LTV:CAC ratio and payback period.
5
Review LTV, ratio, and payback
The calculator updates instantly. Review the LTV value, LTV:CAC ratio, payback period in months, and the 5-year projection table to plan acquisition spend.
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Customer lifetime value FAQ
Common questions about LTV, LTV:CAC ratio, and how to plug Shopify or Stripe numbers into the formula.
What is customer lifetime value (LTV)?
Customer lifetime value is the total gross profit a typical customer generates for your store over the entire time they keep buying. The standard ecommerce formula is Average Order Value x Purchase Frequency x Customer Lifespan x Gross Margin %. LTV is the ceiling on what you can spend to acquire a customer profitably.
What is a good LTV:CAC ratio?
A healthy ecommerce LTV:CAC ratio is around 3:1. Below 1:1 you are losing money on every customer. Between 1 and 3 you are barely covering acquisition. Above 5:1 you may be underinvesting in growth and leaving market share on the table. The right target depends on payback period requirements and how fast you can recover cash.
How do I calculate LTV from a Shopify dashboard?
Pull three numbers from Shopify Analytics: average order value, repeat purchase rate (or orders per customer per year), and gross margin. Multiply AOV by purchase frequency by customer lifespan by gross margin. Shopify's customer cohort report gives you retention rate; convert it to lifespan with the formula 1 / (1 - retention rate).
What is the difference between gross LTV and net LTV?
Gross LTV is total revenue per customer (AOV x purchase frequency x lifespan). Net LTV applies your gross margin so it reflects actual profit, not revenue. Investors and growth teams use net LTV because that is the cash you can spend on acquisition. Always compare net LTV to CAC, never gross LTV.
How do retention rate and customer lifespan relate?
Customer lifespan equals 1 divided by (1 minus annual retention rate). A 70% retention rate means an average lifespan of about 3.3 years. Retention is easier to measure from cohort data while lifespan is more intuitive for projections, so the calculator lets you input either one.
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