Customer lifetime value (LTV)

Customer lifetime value is the total profit one buyer leaves across all their orders with you, not just the first. Calculate it by multiplying average profit from a delivered order by average orders per customer. A higher LTV lets you pay a higher acquisition cost than competitors, because the second order costs no ads.

Also calledLTVCLVCustomer valueLifetime customer value

Updated August 14, 2026SymplysisAI editorial team

The formula

LTV = Average profit from delivered order × Average orders per customer

Average profit from delivered order: selling price minus product cost, shipping, packaging, and share of returns.
Average orders per customer: delivered orders ÷ unique customers in the same period.
The period must be closed and complete, like the last 12 months, not a forecast for years ahead.

Worked example

An Algerian store over 12 months

1500 different phone numbers placed 650 delivered orders, so 650 ÷ 500 = 1.3 orders per customer.
2Average profit from delivered order after all direct costs: 1,200 DZD.
3LTV: 1,200 × 1.3 = 1,560 DZD.
4Customer acquisition cost: 900 DZD, so 1,560 ÷ 900 = 1.73.

Takeaway: Lifting orders per customer from 1.3 to 1.8 raises LTV to 2,160 DZD and lets you pay higher acquisition cost on the same product.

What it means in practice

In COD most customers don't return automatically because there's no saved account or registered card. Repeat purchase needs intentional work: a WhatsApp message after delivery, an offer on a complementary product, or a reorder call. Without it, LTV stays close to first-order profit.

Calculate LTV by profit, not revenue. A customer who spent 8,000 DZD on three orders at 25% margin left 2,000 DZD total—that's the number you compare to their acquisition cost.

Use phone number as your customer key, not email. In Morocco, Algeria, and Egypt the customer fills in their phone number on the order form, and matching orders by phone is the only practical way to measure repeat.

Split LTV by the first product each customer bought. A cheap gateway product may bring customers who repeat often, while an expensive one may bring a one-time buyer, and the gap changes your budget for each campaign.

Common mistakes

Calculating LTV by revenue instead of profit, showing a big number that justifies an acquisition cost the margin can't support.
Assuming repeat purchase that hasn't happened yet: the math is from actual orders in a closed period, not an optimistic forecast for future years.
Counting confirmed but undelivered orders in a customer's history, inflating order average with no cash counterpart.
Measuring LTV for a two-month-old store and setting annual ad budget on it.

Questions and answers

How do I measure LTV without customer accounts in my store?

Match orders by phone number—it's the field every customer fills on the COD form. Pick a closed period like the last 12 months, divide delivered orders by unique phone numbers, then multiply by average profit per delivered order.

What's the link between LTV and acquisition cost?

LTV is the ceiling—acquisition cost must not exceed it. The wider the gap, the more room you have to compete on ads. A narrow gap means you're buying customers with no profit left over to fund growth or absorb mistakes.

Can I raise LTV quickly?

Fastest lever is lifting first order value with a bundle or complementary product, because it works the same day. Repeat purchase takes post-delivery follow-up and products fit for rebuying like consumables or beauty, and the effect shows in months.

Is LTV useful for a product bought only once?

Yes but differently. If the product doesn't repeat, LTV stays close to first-order profit, and the path to lift it is selling a complementary product to the same customer later. Ignore that and you've set your ad budget on just one order's profit.