Email & Retention
How to calculate repeat customer value for a Shopify store
Repeat customer value should be based on the contribution customers generate after their first purchase, not just the revenue they spend.
Start with cohorts
Take customers acquired in a defined month and track their later orders. For example:
1,000 new customers acquired in January.
Within 12 months they generate $120,000 additional revenue.
Average repeat revenue = $120 per acquired customer.
Convert revenue to contribution
If repeat orders carry 45% contribution after product and variable costs:
$120 × 45% = $54 expected repeat contribution per original customer.
That $54 can inform how much more you might rationally spend on acquisition.
Account for time
$54 earned within three months is more useful for scaling than $54 earned over four years.
Segment
Repeat value can vary by:
- First product
- Country
- Acquisition channel
- Discount
- Subscription status
Avoid survivor bias
Do not calculate value only from customers who returned. Include all originally acquired customers in the cohort denominator. This produces an expected repeat value you can actually use for acquisition decisions.
Put repeat value into your marketing targets
If your Shopify store has repeat customers but you are not using that value in marketing targets, send us an inquiry.