LTV and cohort analysis: how much your webshop can pay for a new customer

Most webshops decide how much to pay for a new customer by looking only at the first order. If ROAS is below a certain threshold, the campaign is switched off. But a good customer doesn't buy just once. Their long-term value, LTV, tells you how much you can afford to pay to win them, and cohort analysis shows whether that value actually exists in your data. This guide uses DKK and examples from Danish webshops. What LTV is and why it matters LTV (lifetime value) is the amount a customer brings in over their relationship with your webshop. For marketing decisions, you don't care about revenue but about the contribution margin the customer brings: what's left after product cost, shipping, payment fees and returns. I explain how to calculate it in the article on contribution margin vs ROAS . I always work with a 12-month LTV, not "lifetime". A short horizon is safer, easier to check and stops you paying today for orders that may never come. How to calculate 12-month LTV .comparison-cards { display: flex; flex-direction: column; gap: 1.5rem; } .comparison-card { background: #fff; border-radius: 16px; padding: 20px; border: 2px solid #efefef; } .comparison-header { display: flex; justify-content: space-between; font-size: 16px; margin-bottom: 12px; } .comparison-row { display: flex; justify-content: space-between; padding: 8px 0; border-top: 1px solid #efefef; font-size: 14px; color: #1f2937; } .comparison-label { font-size: 14px; width: 100%; } .comparison-value { width: 100%; text-align: right; } @media (max-width: 600px) { .comparison-row { flex-direction: column; align-items: flex-start; } .comparison-value { text-align: left; margin-top: 4px; } } 12-month LTV DKK Average order value excluding 25% VAT 600 Contribution margin 35% Margin per order 210 Average orders per customer in 12 months 1.6 12-month LTV in margin 336 On average, a new customer brings you 336 kr. of margin in the first year. If you pay 140 kr. to win them, you have 196 kr. left for fixed costs and…