LTV (Customer Lifetime Value)

Total revenue or margin you expect from one customer over their relationship. Formula: AOV × purchase frequency × lifespan × gross margin %.

By Growthegy Team

Citable benchmarks

Average ecommerce conversion rate is often ~2–3% (varies widely by industry and traffic mix).

Source: IRP Commerce — Ecommerce Market Data (Jan 2026)

Average ecommerce cart abandonment rate is 70.19%.

Source: Baymard Institute — Cart Abandonment Rate Statistics (2024)

Key takeaways

  • LTV (Customer Lifetime Value) — focus on one metric or lever at a time; validate with data before scaling spend.
  • Pair reading with free Growthegy calculators (LTV, ROAS, break-even, pricing) to turn ideas into numbers.
  • Bookmark growthegy.com/tools/ and run the Profit Diagnosis when you need a prioritised roadmap.

Definition

LTV — Total revenue or margin you expect from one customer over their relationship. Formula: AOV × purchase frequency × lifespan × gross margin %.

Related tool

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Frequently asked questions

What is a good LTV:CAC ratio?
A common ecommerce benchmark is 3:1 or higher—each customer worth at least three times what you paid to acquire them. Tighter margins or higher fixed costs may require a higher ratio before scaling hard.
How do you calculate LTV for ecommerce?
Multiply average order value by purchase frequency per year, by average customer lifespan in years, and by gross margin percent (for contribution LTV). Alternatively use cohort revenue minus variable costs over a defined window.
Where can I model LTV with my own numbers?
Use the free LTV calculator on Growthegy (linked from this glossary term) or save a profile in My Store to reuse inputs across guides.

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