Glossary
Customer lifetime value (CLV / LTV)
Definition
Revenue LTV vs profit LTV
Revenue LTV answers "how much did this customer spend". Profit LTV answers "how much did we keep". The gap between the two is everything you gave away along the way: discounts they used, shipping you absorbed, items they returned, and the margin of what they actually bought.
The difference changes decisions. Acquisition budgets set against revenue LTV systematically overpay for customer segments that spend a lot and return a lot. Shopify's built-in analytics include cohort and RFM customer reports measured on spend; Easy Profit Calculator's customer report measures lifetime value as average net profit per customer instead.
How to read LTV on a real store
Three views do most of the work. First-vs-repeat: what share of orders, revenue and profit comes from customers ordering again - the health check on retention. Top customers: who is actually worth keeping, ranked by profit rather than spend. And acquisition cohorts: whether the customers you acquired this month are building value the way last year's did.
If cohort economics run your business - subscriptions, consumables, CAC payback planning - a dedicated LTV tool goes deeper; see our honest Lifetimely comparison. For most stores, profit-based LTV plus monthly cohorts answers the question that matters: which customers make you money.
Example
A customer places 4 orders totalling $380. After product costs, fees, shipping and one return, the profit across those orders is $74. Revenue LTV: $380. Profit LTV: $74.