How to Measure Customer Lifetime Value by Marketing Channel

Customer lifetime value by channel is the number that settles budget arguments. A channel that wins cheap first purchases can still lose money, and a channel with an expensive first sale can be your best one by the second year. The Lifetime value report follows the customers each channel brought in and adds up everything they have paid since.

Open Reports in the left sidebar, then Lifetime value under Revenue. It needs a connected payment tool or Shopify store.

How the date range works here

On this report the date range chooses who you are looking at, not which payments count. It opens on the last 12 months, which means “customers who first paid in the last 12 months, and everything they have paid since.” Widen it to look at older customers.

Step 1: Read the headline figures

• Paying customers: people who have paid at least once. Someone who paid three times counts once.
• Lifetime value: the total those customers have paid, including after the period
• Average lifetime value: lifetime value per customer
• Repeat rate: the share of customers who bought more than once. Refunds never count as a second purchase.
• Orders per customer: payments per customer

Step 2: Read the cohort grid

Cumulative revenue by month of first payment groups customers by the month they first paid (rows) and shows what they paid in each month since (columns). Switch the view above it:

• Cumulative: revenue so far, adding up month by month
• Per period: revenue in each month on its own
• Retention: the share of each cohort still paying
• Customers: how many customers each cohort holds

Turn on Per customer to divide every cell by the cohort’s size, which makes a small cohort comparable with a large one. All cohorts at the bottom combines every row, weighted by size, and cells for months that haven’t happened yet stay blank. Darker shading means higher than other cohorts at the same age.

Step 3: Compare channels by lifetime value

Lifetime value by channel lists the headline figures for every channel, plus MRR from acquired customers, the recurring revenue those customers still pay today. Tabs switch to source, medium, campaign, referrer, landing page, or country.

Each customer counts once, under the first touch behind their first payment. Sort by average lifetime value to find the channels whose customers are worth the most, not just the ones that bring the most customers.

Step 4: Check payback by channel

Payback by channel answers “how long until this channel’s customers cover their cost?” For each channel you get:

• Marketing cost in the months its customers were won
• New customers and Cost per customer
• Revenue so far from those customers and the share of the cost Returned
• Paid back in: how many months it took

Payback needs costs to work with. Ad spend comes in from connected ad accounts. Add retainers, fees, and other costs under Setup -> Costs, as explained in the Spend report guide.

What’s next

• Put every marketing cost against leads: Spend report
• Track MRR and churn for subscriptions: Subscriptions report
• See which products customers buy: Products report