Cohorts Retention Definitions
Metrics | Defintions |
|---|---|
Lifetime Revenue | = Net Sales + Shipping + Tax |
Average Lifetime Revenue | = (Net Sales + Shipping Revenue + Tax) / Customers |
Lifetime Value. ("LTV", "Cohort LTV") | = Net Sales (Gross Sales - refunds - discounts) - Costs LTV is the lifetime profit from the customers in a cohort. Cohort Lifetime Value is the lifetime profit from the customers in a cohort. Cohort LTV is the sum of net sales (gross sales - refunds - discounts) minus the sum of all costs for each cohort. As people purchase more it increases. When costs of goods sold (COGS) are not available, LTV is effectively the sum of net sales for the lifetime of the cohort. It is cumulative |
Customer LTV. ("CLTV" or "Average LTV") | = [ Net Sales (Gross Sales - refunds - discounts) - Costs ] / Customers Customer LTV is LTV divided by the number of customers in the cohort. It is profit over time. It takes the total revenue, and subtracts, costs, refunds, discounts and divides that by the total number of customers in the cohort. It is cumulative Customer Lifetime Value, usually referred to as LTV (sometimes as CLTV or CLV) measures the profit your business makes from any given customer. The purpose of the customer lifetime value metric is to assess the financial value of each customer, or from a typical customer in case you’re measuring it generally. Customer lifetime value helps you make important business decisions about sales, marketing, product development, and customer support, such as: How much should I spend to acquire a customer? |
Net Sales | Equates to gross sales - discounts - returns. Net sales does not include shipping charges or taxes. It will be a positive number for a sale on the date that an order was placed, and a negative number for a return on the date that an order was refunded. |
LTV to CAC ratio | Customer Lifetime Value to Customer Acquisition Cost ratio measures the relationship between the lifetime value of a customer and the cost of acquiring that customer with a same day attribution and a blended CAC. The metric is computed by dividing LTV by CAC. It is a signal of customer profitability, and of sales and marketing efficiency. The calculation is the CAC of customers at the time they made a first purchase compared to LTV until today. Numbers are multipliers so, for example, 2.15 means that LTV is 2.15 times the CAC value. 1.00 would mean the cost = the return. Companies want to strive for numbers larger than 1.00, and 3.00 is a very healthy ratio to reach within 12 months in any cohort. |
Cohort AOV per Month | Average Order Value (AOV) per cohort by month. |
Discount by Cohort | Total discounts from the customers in a cohort |
Refunds by Cohort | Total refunds from the customers in a cohort |
Updated 3 months ago