Free DTC diagnostic
Most DTC brands calculate LTV wrong — using gross revenue instead of contribution margin. This tool shows you your real 12-month and 24-month LTV, your honest LTV:CAC ratio, and how long it actually takes to pay back acquisition costs.
Your customer economics
The gap shows how much your LTV is overstated when calculated on gross revenue.
Common questions
Gross revenue LTV ignores the variable costs that scale with every order — shipping, returns, payment processing. A brand calculating LTV on revenue might think their LTV is $180 when the real contribution-margin LTV is $95. That gap leads to overspending on acquisition by 40–80%. See our guide on why most DTC brands calculate LTV wrong.
Pull your cohort data from Shopify: for customers who made their first purchase in a specific month 12+ months ago, calculate the average number of orders they placed in their first 12 months. Repeat for several cohorts and average. Don't use blended averages from your full customer base — cohort data is more accurate.
On a 12-month contribution-margin basis, 3:1 or higher is healthy for most DTC brands. Below 2:1 means your paid acquisition is structurally marginal — you're barely recouping acquisition cost within a year. Above 5:1 often signals under-investment in acquisition: you have room to spend more before hitting diminishing returns.
Under 6 months is healthy for most DTC brands and allows aggressive scaling without cash flow strain. 6–12 months is viable but requires careful working capital management. Over 12 months creates a cash flow trap as you scale — revenue grows while the business becomes structurally less solvent.