LTV
Lifetime Value (LTV) is the revenue you can expect to earn from a customer over their entire relationship with your app. It tells you how much you can afford to spend acquiring and supporting a merchant — and which plans or customer segments are most worth investing in.
Prerequisite
LTV requires your Partner API to be connected and synced. The calculation becomes more reliable as more subscription history accumulates.
How Ranksy calculates LTV
Ranksy uses a formula based on your app's actual financial data, not an assumed fee rate:
LTV = Net ARPA × min(1 ÷ monthly churn fraction, 60 months)
Where:
| Component | How it's derived |
|---|---|
| Net ARPA | Gross ARPA × your actual net/gross ratio from the Partner API |
| Monthly churn fraction | Your 30-day logo churn rate ÷ 100 |
| 60-month cap | Projected lifetime is capped at 60 months when churn is very low |
Why Net ARPA instead of Gross ARPA?
Shopify takes a platform fee on every transaction. The fee percentage depends on your Partner tier and agreement. Rather than applying an assumed percentage, Ranksy reads the actual gross and net amounts from your Partner API and computes the real ratio. This makes the LTV figure an honest estimate of what you actually receive, not what Shopify bills to merchants.
The 60-month cap
A very low churn rate (e.g., 0.1% monthly) would project an unrealistically long customer lifetime. Ranksy caps the projection at 60 months (5 years) to keep the number grounded. This also means a healthy, low-churn app will show a higher LTV than the formula would produce without a cap — rather than zero, which is what a naive formula returns when churn is near zero.
What the LTV tab shows
Summary cards
| Card | What it means |
|---|---|
| Average LTV | Blended net LTV across all active customers |
| Net ARPA | Average monthly net revenue per paying customer |
| Projected lifetime | Average projected months at current churn (max 60) |
LTV by plan
The per-plan table breaks LTV down so you can see which plans drive the most lifetime value:
| Column | Description |
|---|---|
| Plan name | As set in Shopify |
| Subscribers | Current paying count |
| Net ARPA | Average net monthly revenue per subscriber on this plan |
| Churn rate | 30-day logo churn for subscribers on this plan |
| LTV | Estimated lifetime value for a customer on this plan |
You can exclude specific plans (e.g., a legacy $0 free plan) using the plan filter at the top of the page — they remain selectable so you can add them back.
LTV trend over time
A time-series chart showing how average LTV has moved over the selected date range. Rising LTV means your churn is falling, your ARPA is growing, or both. Falling LTV demands attention before it shows up in MRR.
LTV distribution
A histogram showing the spread of individual-customer LTV estimates. A wide distribution with a long right tail indicates a small number of very high-value customers — understanding and retaining those merchants should be a top priority.
Top customers by LTV
The highest-value customers ranked by projected LTV. This list is useful when deciding where to invest customer success resources or who to reach out to for case studies and references.
LTV and churn are tightly linked
Because LTV = Net ARPA ÷ churn rate (up to the 60-month cap), a 2× improvement in churn rate roughly doubles LTV — even with no change in pricing. This is why reducing churn is often the highest-ROI lever available to a Shopify app business.
FAQ
Q: My LTV looks very high. Is that right? A: If your churn rate is very low (< 1% monthly), the projected lifetime is long, and LTV can appear large. Confirm your churn rate on the Churn tab — if it matches expectations, the LTV is accurate.
Q: Why does LTV differ between plans? A: Plans differ in ARPA and churn rate. A $20/month plan with 2% monthly churn has a different LTV from a $99/month plan with 0.5% monthly churn, even though the second plan is 5× the price — the lower churn makes the lifetime much longer.
Q: Can I exclude trial-only installations from LTV? A: LTV is calculated on active paying customers only (positive MRR, not on trial). Merchants currently in a free trial are excluded automatically.
Q: The LTV is 60 months × Net ARPA. Is churn really that low? A: If you see a LTV that exactly equals 60 × Net ARPA, your monthly churn rate is low enough that the 60-month cap is binding. That's a good problem to have.
Next steps
- Churn — the key driver of LTV
- NRR — expansion and contraction alongside churn
- Subscriptions — per-plan subscriber counts
- Revenue Overview — top-line MRR and earnings