How to investigate the issue
Lifetime value is often used loosely. A useful planning estimate for ecommerce begins with average order value, expected purchases each year, gross contribution margin and assumed customer lifespan. For example, a $65 average order, three purchases per year, 35% gross margin and two-year horizon yields an illustrative $136.50 in gross contribution. This is not cash profit or a guaranteed prediction. Actual customer behavior can change after the first order, and returns, discounts, shipping, support and acquisition expenses can reduce what a customer contributes. Use cohorts when possible, and compare the estimate against customer acquisition cost rather than treating revenue alone as LTV. For businesses with very little repeat business, be especially conservative about the years and repeat purchase rate assumptions.
Relevant free diagnostic tools
- Customer Lifetime Value Calculator
- Repeat Purchase Rate Calculator
- Customer Acquisition Payback Calculator
Official reference
Google Merchant Center product data specification. Check current policies and your account for definitive eligibility details.