How to read a Lifetime Value by Customer Cohort Chart?

Many of you want to know what the CLTV for your customer is and then you want to know if it is good.
There are many ways to approach this, but to start here is where we would start gathering information.

CLTV at Month 1

You need to look at what the CLTV is for Month 1 and see the if it changes between different cohort months. For example, is it $20 one month (April 2021 Cohort) and ~$40 the rest of the cohort months in the past 12 month period. Why is that? Is it because you ran a super sale and promotion? Why were those customers acquired at lower value.
Now the question is, did that result in a higher/ healthy LTV over time? Did those customer you acquire at a lower amount end up coming back to purchase again and spend more. Was this good for your business?

CLTV decreasing

If your CLTV is decreasing then you should look at the Refunds by Cohort metric to see the Refunds behavior and how that is impacting LTV.

CLTV growth rate

Is your customer lifetime value growing from month to month?

Are the numbers increasing?
Read the growth rate from month 1 to month 12 (we don’t have a metric for this yet- but soon).

= [(month 1-month12)/month] 100 = growth rate*

XX% growth from month 1 to month 12 on average.


Helpful summary sentence to put the story together.

Our first month CLTV for past 12 months (or pick another timeframe) is $XX and it grows xx% by Month XX (month 3, 6, 12 are all good benchmarks).

You then can point out specific cohort months behavior.

Month xx we acquired xx customers. Their month 1 CLTV was $xx but then by month 6 it grew to xx. The Repurchase rate for that cohort by month 6 is xx%.