There are a lot of different metrics you can use to track customer retention and loyalty. Lifetime Value (LTV) is a good one for many stores. Since it measures how much a customer has spent already, it’s clear and straight-forward to calculate. That’s why it’s used a lot with paid advertising. LTV has some drawbacks …
Tag: customer lifetime value
What you can do once you know your Average Orders per Customer
Once you calculate your Shopify store’s average orders per customer, you have the data needed to answer a variety of questions. Should you design a loyalty program around 5 orders or 10 orders? When should bonus gifts be added to an order? Are customers only ordering a second or third time, or are they ordering …
So many Lifetime Values, so little clarities
This week I was doing some research on how to calculate a customer’s Lifetime Value (aka LTV, CLTV, CLV, CV, BBQ, LOL, TLA…) It seems that no one agrees on even a definition of what Lifetime Value is, let alone how to calculate it. For some people it’s the sum of the amounts a customer …
Using customer lifetime values for fun and profit
While you have to be careful averaging customer lifetime values (CLTV), they can be very useful when you keep them associated with the individual customer. Knowing how much each customer has spent is a great way of segmenting. Customers who spend a lot will tend to share behavior, while same as customers who spend very …
Dangers of using Lifetime Value with your Shopify customer acquisition plan
Customer lifetime value (LTV or CLTV) is a useful metric for a lot of things in Shopify. One area where I like to urge caution with it in as part of your customer acquisition budget. The common advice is to make sure you spend less to acquire a customer than what they contribute to your …
The impact Repeat Purchase Rate has on your customer’s lifetime value
Customer lifetime value (CLTV or LTV) is a good metric to watch. Unlike the average order value, CLTV takes into account your customers’ repeat orders. Usually when your store’s overall CLTV goes up, good things are happening. In my experience with repeat customer funnels, there’s another great metric: repeat purchase rate (RPR). Repeat purchase rate …
Your customer’s spending habits: are they buying more or less over time?
Knowing how much your repeat customers purchase over time is knowing a very powerful metric. The more repeat customers spend and the higher the likelihood of them making a repeat purchase (your Repeat Purchase Rate), the more you can spend to acquire and get repeat orders. That means you can out-bid competitors in paid advertising, …