Glossary
Customer lifetime value (CLV)
The revenue, or profit, one customer brings your store over the whole relationship: either spend to date or a forecast of future spend. A simple estimate is revenue divided by customers.
By MergeGuard team
Last updated
Spend to date is a fact in your orders. A forecast of future spend needs enough order history. Shopify’s data model keeps amountSpent, “The total amount that the customer has spent on orders in their lifetime”, on each customer record, and the pages we read do not say whether refunds are netted out.
CLV decides how much you can spend to win a customer and who counts as a VIP. The simple version divides revenue by customers, so every duplicate profile adds one more “customer” to divide by and makes each one look less valuable than they are.
The same split hides your best customers. A shopper whose spend is spread over three profiles may sit under your VIP threshold on each of them. In MergeGuard’s demo store, counting people instead of profiles moves the VIP list from 18 VIPs on single profiles → 27 VIPs as people Demo store (Northsail Supply). See VIP audiences.
Related
- How duplicate customers distort your repeat purchase rateHow duplicate Shopify profiles distort repeat purchase rate and value per customer, with the formulas, a worked example and steps to measure it on your store.
- Repeat purchase rateRepeat purchase rate is the share of customers who ordered two or more times in a period. Get the formula and see why duplicate profiles usually pull it down.
- VIP listsMergeGuard’s VIP audience builds your Shopify VIP customers list from each person’s spend across all their profiles, so split customers reach your threshold.