Shopify Ops Glossary
CLV (Customer Lifetime Value)
The total revenue a customer generates over their entire relationship with your brand.
Definition
Customer Lifetime Value (CLV or LTV) is the predicted net revenue attributed to the entire future relationship with a customer. It is calculated using average order value, purchase frequency, and average customer lifespan.
Why It Matters for Shopify Brands
CLV determines how much you can afford to spend on customer acquisition (CAC). A CLV:CAC ratio of 3:1 or higher is generally considered healthy for ecommerce brands.
Benchmarks
Shopify brands with strong repeat purchase programs typically achieve CLV 3–5x their AOV within 12 months.
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