How do I calculate customer LTV for my D2C brand - on revenue or on margin?
The short answer
Always compute LTV on contribution profit, not revenue - a customer who buys ₹10,000 of product at 20% margin is worth less than one who buys ₹6,000 at 55% margin, and revenue-based LTV hides that completely. Project it off actual cohort repeat curves, not an assumed 'average customer lifespan,' and recompute it as new cohort data comes in rather than treating it as a fixed number. Margin-based LTV is also the only version that's honest against your CAC when you're deciding how hard to push paid spend.
A quick summary to orient you. The real value is below: the resources worth your time, from people who've actually done it, not us.
Here are the resources
Hand-picked from around the web, each with a note on why it earns your time. India-specific ones carry a badge.
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📄 Article
✓ Link checkedFreeIntermediate
Why we picked it
Goes beyond the LTV formula into churn diagnostics - why a cohort's LTV curve flattens - which is the more useful, actionable half of the LTV conversation for most founders.
Why we picked it
A Shopify-specific breakdown that acknowledges the real data-quality challenges (multi-channel orders, guest checkout, refunds) that make LTV harder to calculate cleanly than the textbook formula suggests.
Why we picked it
Ties LTV back into the broader unit-economics stack - CAC, contribution margin, ROAS - so you don't calculate LTV in a vacuum disconnected from what it's actually meant to inform.
