Recapping LTV

7 apps for better eCommerce 👀 

Hey there.

You’re reading the Early Checkout with Kent Wilson, ex-COO and current paid media growth manager at RV SnapPad, a family-owned DTC business worth 7 figures today.

Recapping LTV

We never thought about lifetime value (LTV) when we were first growing SnapPad. But things changed after COVID. 

→ For reference, it used to cost us around a $30 cost per acquisition (CPA) to get sales on Meta in 2016-17. 
→ In 2022, it spiked over $120. 

This was due to a number of factors (hello iOS 14, shipping disruptions, inflation, etc).

But margins = gone.

We’ve shrunk our cost of acquisition (CAC) since with dedicated media buying and ad creative efforts, but our CPA on Meta still averages over $90 at scale. 

Because the truth is, it isn’t up to us.

Macro economic forces influence CAC and there’s nothing we can do about it.

To future proof your brand, focus on what you can control — always.

AOV/LTV.

☑️ Why LTV Matters

While understanding your contribution margin and first purchase targets is absolutely necessary, focusing on LTV shifts your thinking from just day-to-day ROAS to building real, long-term growth. 

First purchase gives you one image of customer value.
LTV another (much more accurate) one.

From there, you can make better decisions on who you’re actually looking to acquire.

Quick background

Starbucks was one of the first big companies to harp on LTV. And they conceptualized it as true lifetime value. Meaning how much a customer buys at Starbucks over a long period of time.

But in DTC, the first 90 days are the most operationally relevant. 

Because you're not a massive, multinational corp sitting on millions, you can't really wait 6, 12, 24 months for LTV. 

Your cash conversion cycle is centered around day-to-day sales, as well as monthly bills like inventory and marketing, so someone buying again a years from now is not relevant to your current marketing or ops. 

🟰 How to Calculate LTV 

You don’t need fancy tools out of the gate. 

Just a list of customers, how much they spent, and your gross margin.

Step‑by‑Step:

That’s your baseline…the margin-backed value per customer in the first 90 days.

⚠️ Remember to calculate net LTV after things like returns, chargebacks, etc. (not just gross margin)

This is a good starting point. 

But averages are only one part of the story.

If you want to make truly informed and smart decisions with your money…. Read on.

🎯 How Cohort Segmentation Unlocks Growth

Let’s say your 90‑day LTV average is $38. But when segmented:

See the gap? That’s the magic of cohort segmentation.

Because while your average 90-day LTV might be $42, your TikTok offer buyers might be worth $28, but your Product A evergreen buyers might be worth $75 🤯

You can segment cohorts based on things like:

• First SKU purchased

• Promo code used

• Acquisition channel

• Purchase period (e.g., sales vs evergreen)

Once you see who brings in more LTV, you can:

• Double down on acquiring them

• Highlight your best SKU on landing pages

• Refine your offers and product roadmap

This level of insight becomes more useful once you’ve built a bigger catalog and captured enough data across multiple SKUs, different acquisition channels, and seasonal swings.

Most importantly, it helps you know if a traffic/purchase spike is TRULY valuable or not. 

→ Got a big spike in December? Thinking about spending 5x on ads around that time this year? Check those customers’ LTV first. 

They might not be as valuable as you thought. 

Find this useful? Please spread the word!

🙇 

🛠️ LTV Tools

1. Shopify (built-in cohort reports)

Shopify’s Customer Cohort Analysis report groups customers by the month they first purchased. With it, you can:

• Track behaviors like repeat orders, AOV, retention rate

• See predicted future spend (on Advanced/Plus plans)

Great for: Basic time-based cohorts.

Limitations: Not built for easy segmenting by product/channel easily, no margin view, limited export options.

2. Mid-tier Analytics Platforms (Lifetimely, Peel, RetentionX)

These tools:

• Pull all your Shopify data automatically

• Let you view cohorts by SKU, discount, channel, or offer

• Show LTV by gross or net margin

• Provide easy dashboards and exports

Great for: Scaling brands that want deeper insight fast.

3. DIY with Google Sheets

To get started without tech or tools, you can export customer lists and order history.

Then:

• Tag each customer by cohort (time-based)

• Calculate initial AOV, second, third purchases over first 30-90 days

• Apply your gross margin ratio

Great for: Cash-strapped founders who want clarity and control.

Final Word: Know Your LTV, Know Your Levers

It takes some time and effort to integrate LTV into your decision-making.

But it’s kind of like upgrading from a Ford Fiesta to a Ferrari.

You won’t want to go back.

In fact, you can’t afford to — it’s just an infinitely better way to run your business.

Put the work in and become a real player.

ADVERT

Is there demand for your product?

If no: You need to create demand.
That means tapping into desire and curiosity.
→ Use performance ads to intercept attention.
→ Partner with creators to spark interest and trust. (More on that in the next issue.)

If yes: Then people are already looking for what you sell. You just need to get in front of them.

👉️ Click for SEO — the compounding play.
Build visibility with long-term content that ranks on Google. Great for lowering CAC over time and owning intent.

👉️ Click for PPC — the fast lane.
Bid on the right keywords and appear instantly in front of buyers. Great for testing offers or getting early traction.

Until next week,
Kent
Paid Media Growth at RV SnapPad

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