What is a customer worth to your Shopify store?
Average order, how often they buy, and how many years they stay. You get the revenue one customer brings in — the ceiling for what you can spend to win them.
- Lifetime valueRevenue from one customer over time
- Orders over that timeHow many times they come back
- Revenue per yearWhat a customer is worth each year
Why Shopify merchants calculate lifetime value
Judging ads on the first order alone makes repeat-purchase products look unprofitable. Lifetime value shows what a customer brings over the time they stay, which is the real ceiling for acquisition cost. A store with a $60 average order and three orders a year for two years has a $360 customer, not a $60 one — and can outbid a competitor who only counts the first sale.
Lifetime value is revenue, not profit. Pair it with the profit margin calculator to turn it into the margin a customer leaves, and with the progress bar calculator when you want the free-shipping and gift goals that lift the average order those repeats sit on.
Shopify customer lifetime value is the revenue one customer brings in while they keep buying — not the first order. Average order value, orders per year, and years they stay multiply into that number. It is the ceiling for what you can pay to acquire a customer. Stores that only judge the first sale underbid on products people repurchase.
Lifetime value here is revenue. Profit is smaller. Run the same order through the profit margin calculator, then keep acquisition cost under the margin a customer leaves, not under the revenue. If the first order must stand alone, set the target in the ROAS calculator and treat repeat orders as upside.
How to use the lifetime value calculator
- Find average order value in your Shopify reports.
- Work out orders per year: orders divided by customers over twelve months.
- Enter how many years customers stay. Use 1 if the store is under a year old.
- Read lifetime value, then multiply by your margin before you set an ad cap.
For a worked example and the common mistakes, read Shopify customer lifetime value: what one customer is worth.
Lifetime value questions Shopify merchants ask
Where the inputs live in Shopify and how to use the result when buying ads.
Where do these numbers come from in Shopify?
Average order value is in your Shopify reports. Orders per year is orders divided by customers over a year. Years they stay is how long those customers keep buying — use returning-customer reports or a realistic estimate.
How much can I pay to acquire a customer?
Less than the margin a customer leaves over their lifetime, not just on the first order. Take the lifetime value here, apply your margin from the profit margin calculator, and keep acquisition cost well under that.
Is lifetime value the same as profit?
No. It is revenue over time. Subtract product cost, shipping, and fees to get lifetime profit — that is the number that should cap your ad spend.
How do I raise customer lifetime value on Shopify?
Lift the average order with bundles and free-shipping thresholds. Set those thresholds from your AOV in the Shopify progress bar calculator, then bring customers back with email and SMS flows. The app detector shows which apps competitors use for the cart bar and the follow-up.
What is a good customer lifetime value?
At least three times what it costs you to acquire a customer is a common target. Below that, growth eats the margin.
How do I calculate customer lifetime value for Shopify?
Multiply average order value by orders per year by the years a customer keeps buying. A $60 order, 3 times a year, for 2 years is $360 of revenue from one customer.
Where do Shopify lifetime value inputs come from?
Average order value is in Shopify reports. Orders per year is orders divided by customers over a year. Years they stay is how long those customers keep coming back — use a real window, not a hope.
How much can I spend to acquire a Shopify customer?
Less than the profit they leave over their lifetime. Take lifetime revenue, apply your margin, and stay under that. Spending the full lifetime revenue on ads means you worked for free.
How do I raise lifetime value on a Shopify store?
Raise the average order with bundles and a free-shipping threshold, and bring people back with email or a subscription where the product is consumable. The app detector shows which apps other stores use for that.
Is a 3:1 lifetime value to acquisition cost a rule?
It is a common target, not a law. If the product is a one-time purchase, lifetime value is close to the first order and the ratio is harder. If they reorder, you can pay more for the first sale.
What should I enter for years retained if my store is new?
Enter 1. A number you cannot back with data inflates the ceiling you set for ad spend. Update it when you have a returning-customer cohort that is a year old.