Marketing, Technology

How to increase customer lifetime value by 2–4X in Shopify using memberships

If you’re a Shopify Plus brand, you already know the struggle: customer acquisition costs (CAC) keep climbing while lifetime value (LTV) stays flat. You’ve probably tried loyalty programs, subscriptions, or discount codes, yet your margins remain squeezed and revenue unpredictable.

The good news is you can break this cycle with membership programs. Successful memberships have helped Shopify brands like yours double or even quadruple lifetime value in under a year. 

In this guide, you’ll learn everything about customer lifetime value, how to calculate it, how memberships can help you increase it, and how to launch a membership program that drives growth you can count on.

But first, let’s start with the fundamentals.

What is customer lifetime value (LTV)?

LTV is the total revenue you can expect from a single customer over the entire period of their relationship with your business. For Shopify brands, it’s the metric that tells you whether your acquisition investments pay off.

A high lifetime value (LTV) means you can spend more to acquire customers and still be profitable. It also fuels predictable cash flow and makes your business more resilient.

Over the last five years, most DTC brands have watched their CAC rise while their lifetime value (LTV) has remained stagnated. That’s why improving LTV has become crucial. 

What is LTV in Shopify?

In Shopify, LTV is calculated by looking at three core metrics: average order value (AOV), purchase frequency, and customer lifespan.

While Shopify doesn’t show a single “LTV” number in your dashboard, it does provide the reporting you need to track the components. 

Shopify’s analytics let you monitor customer purchase frequency, average order value, and the dates of first and last purchase, which together give you a clear picture of each customer’s value over time.

Here’s how you can use these metrics to calculate your LTV.

How to calculate LTV in Shopify

You can calculate your brand’s LTV by combining these three components:

LTV = AOV x purchase frequency x customer lifespan

Let’s understand this by using an example: 

If your average Order Value is $75, purchase frequency is 12 times a year, and customer lifespan is 2 years, your LTV would be: 

LTV = $75 x 12 x 2 = $1,800

You can also use more advanced formulas that factor in gross margin, churn rate, and tenure. In any approach, be sure to adjust for refunds and returns to keep your estimates accurate.

To dig even deeper, segment customers by acquisition channel, first purchase behavior, and tenure.

For example, you might find that members acquired via email campaigns have a higher LTV than those from paid ads, or that long-tenure members tend to spend more per order. This level of segmentation helps you identify where your retention efforts have the most impact and tailor offers to specific cohorts.

Most brands, once they figure out their LTV, notice that it remains stagnant even as they invest more in acquisition and retention. If you, too, are seeing a flat LTV despite your efforts, it’s a sign that you may need a different approach to deepen engagement and unlock growth.

That’s where memberships can help you. 

How can memberships help you increase LTV?

Traditional loyalty programs often rely on generic points or one-time discounts. They might work in the short term, but they don’t create a lasting emotional connection, which is important for increasing your LTV.

Memberships solve this by making customers feel like VIP insiders while also creating a cash flow engine. Instead of tying customers to one SKU, they give shoppers access to perks across your entire catalog. They offer: 

  • Exclusivity: Members feel special with early access to products, special pricing, and unique experiences.
  • Store credit: Monthly credits encourage repeat visits and purchases.
  • Flexibility: Unlike product subscriptions, memberships aren’t locked to a single product, offering flexibility to your customers.
  • Higher engagement: The combination of perks and store credit keeps customers active.

Data shows memberships can drive 2–4X higher repeat purchase rates compared to loyalty programs alone. Before we look at how to design a high-impact membership for your brand, here are the results you can expect. 

What can you expect with a high-impact membership program?

Done well and designed thoughtfully, a membership program can transform your business metrics, and here are the results you can expect from a well-executed program.

  • Members spending 2–4X more over 12 months
  • Increase in average order value by 30–50%
  • Membership fees create recurring cash flow up to 6.5X higher than loyalty alone
  • CAC payback periods shorten by 20–40%

Brands like Ana Luisa and Dossier have seen these results firsthand. Their membership programs have turned one-time shoppers into loyal brand champions who spend more often and share their experiences with others. 

When memberships are done right, your customers become your biggest advocates, driving word-of-mouth and organic growth that further amplifies your retention efforts.

Ready to design a membership that’s specific to your brand customers? 

Designing a membership that your customers will pay for

A successful membership program isn’t built on guesswork. It’s based on customer data and thoughtful design.

Here’s what you need to consider:

  • What perks will resonate most? (Store credit, exclusive products, early access)
  • What billing cadence makes sense? (Monthly, quarterly, annually)
  • What price feels like a no-brainer?

Read our detailed guide on how to create a Shopify membership program to know what goes into designing a membership that your customers will love. 

Launching a membership program is easy if you have the right data and the right partner. Here’s how Subscribfy helps you create successful membership programs in 2 weeks. 

Launch a membership program in two weeks that increases LTV by 2–4X with Subscribfy

Subscribfy is the all-in-one retention platform built specifically for Shopify Plus brands that want to launch membership programs quickly and without complexity. Unlike generic tools, Subscribfy combines software and hands-on expertise to deliver predictable growth.

Here’s how our process works:

  • Data-driven strategy: We analyze your store data to design the right offer.
  • Custom UX: We build a branded experience that feels seamless to your customers.
  • White-glove onboarding: From email flows to CX training, we handle setup end-to-end.

Brands like Dossier, Awe Inspired, Ava Estell, and Rose Forever launched their memberships with Subscribfy and saw lifts in repeat purchases and revenue within a year. 

Ready to grow LTV by 2–4X?

Book a demo with our team and see why Subscribfy is trusted by top Shopify Plus brands. Our experts will show you how easy it is to create a fully-branded, data-backed membership program that starts driving results in weeks, not months.