LTV metrics
Hi everyone,
I’ve just noticed that the LTV metric seems to be calculated in gross terms, not net (after tax).
It would be great to confirm whether this is intentional, or if there are plans to support a “net after tax” version - since for most businesses, LTV becomes much more meaningful when based on actual retained revenue :)
Also, I couldn’t find in the Store Settings any specific field for adding the store’s TAX ID (e.g., VAT number).
This is typically required to appear on all invoices, next to the store address, so having a dedicated field for it would be really helpful for legal compliance.
That said - I have to say the reporting system looks absolutely amazing.
The level of detail and clarity is really impressive. Again, great work! 👏
Just a suggestion.. we could have implemened somewhere also the RFM scoring for customers so it would be easy to spot the customer segment (Champions, Loyal Customers, Potential Loyalists, New Customers, Promising Customers, Needs Attention, About to Sleep, Cannot Lose Them, At Risk, and Lost/Hibernating).
The RFM model is based on three quantitative factors:
Recency: How recently a customer has made a purchase Frequency: How often a customer makes a purchase Monetary value (Our LTV): How much money a customer spends on purchasesRFM analysis numerically ranks a customer in each of these three categories, generally on a scale of 1 to 5 (the higher the number, the better the result). The "best" customer would receive a top score in every category.
Example: when a customer scoring would be: 553 it means 5 for recent purchase, 5 for frequent customer 3 for mid LTV. We could calculate the scoring: RFM = (5 + 5 + 3) / 3.
More about RFM:
https://www.shopify.com/blog/rfm-analysis#
Mat That’s a great point, Mat - love the RFM perspective.
It might actually fit nicely with the existing “Time Between Order Created & Completed” grouping. If those tables could evolve toward an RFM-style scoring model, it would make customer insights much more actionable!
Mat I am thinking, that, it could also be really interesting to be able to, "automatically" or "programatically", create FCRM segments for this cases. So as to send segmented campaigns to those groups. (like the VIP offers mentioned on the article you shared 😄).
Definitely, an interesting addition to the Lead Scoring we're missing on FCRM
Jorge de los Reyes Yes. It could be available in fCRM too (however not everybody will use fCRM) but definitely this will help with targeting users.
LTV is nice to see but if it was a one time customer 5 years ago it doesnt say much especially when the margin there could be low and its better to have a frequent customers who purchase high margin products etc.
Having customer segments automatically calculated would give a better overview for the next actions etc.
Mat I wonder if we could use the “calculate profit / margin” available at product level to get also the CAC or COGS on the report area.
Definitely, the development is going to be great!
Jorge de los Reyes - I hope we will see some more measures at some point:
Refund and Return Rate
Churn rate - x cancellations out of Y original subscribers
Active Number of Trials and Expired Trials (without purchase)
Coupons usage (count and value)
Next level 🙌🏻