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Customer analytics: RFM, cohorts, LTV

How to use RFM segmentation, cohort analysis, and LTV to understand your customer base beyond averages.

5 min read

Average customer metrics are mostly useless. The Customers tab gives you the segmented, cohorted view you need to actually understand who's buying and whether your store is a compounding asset.

RFM segmentation

RFM stands for Recency, Frequency, Monetary. Each customer gets a score on each dimension. We group them into 10 actionable segments:

  • Champions — bought recently, buy often, spend a lot.
  • Loyal — regular buyers, high lifetime value.
  • Potential loyalists — bought recently, 1-2 orders.
  • New — first order within the last N days.
  • Promising — one order, early signs of loyalty.
  • At risk — used to buy often, hasn't in a while.
  • Can't lose them — high-value customers who haven't bought in a while.
  • Hibernating — low frequency, low recent activity.
  • About to sleep — declining activity.
  • Lost — haven't bought in a very long time.

Tip

Use these segments for targeted email campaigns. “At Risk” and “Can't Lose Them” should get high-frequency re-engagement. “Champions” should get VIP treatment and early-access offers, not 20%-off coupons that devalue their spend.

Cohort analysis

The full cohort matrix lives under Reports → Cohort analysis. It groups customers by the month of their first order and tracks their spend over the months that follow — answering “are the customers I acquired in January still buying in August?” You can switch the metric (LTV, retention, orders, AOV), accumulate or view period-over-period, and split by order type. See Reports.

For a compounding brand, you want later cohorts to spend as much or more than earlier ones, sustained over time. If early cohorts show a long flat tail and later ones drop off fast, your customer quality is declining — usually a sign of aggressive ad-driven acquisition.

Tip

Two more customer reports are worth a weekly look: Customers at risk (VIPs and repeat buyers who've gone quiet) and Subscription churn (for subscription or hybrid stores). Both are under Reports.

Lifetime Value (LTV)

Computed as the average total_spent across all customers. Compare to your CAC (customer acquisition cost) to know whether you have a sustainable business:

  • LTV < CAC — you're burning money on every customer. Fix immediately.
  • LTV ≈ CAC — break-even. OK short-term, not scalable.
  • LTV > 3× CAC — healthy for most DTC.
  • LTV > 5× CAC — excellent, ready to scale ad spend.

Repeat-buyer rate (Returning %)

Percentage of customers who've placed 2+ orders. For most commodity DTC, this is 15-25%. For subscription-adjacent or refill-heavy brands, should be 40%+. Use it to benchmark your retention against the category.

Subscription detection

For stores using Recharge, Skio, Loop, or native Shopify Subscriptions, Ecom Forward auto-detects subscription orders by inspecting order tags and line-item properties. No configuration needed — if the tags are there, we detect.

For stores marked as subscription or hybrid (set on the Stores page), the Performance page also shows a subscription revenue strip: “Subscription revenue: €X (Y% of orders)”.

Top customers list

A ranked list of your highest-lifetime-spend customers. Useful for:

  • Identifying VIPs who deserve personal outreach.
  • Finding “whales” that distort average-based metrics.
  • Exporting for CRM imports (email, shipment bundles, thank-you notes).

Multi-store view

The “All stores” selector aggregates customers across stores. If a customer exists on multiple stores (same email), they're deduplicated for LTV calculations — their lifetime spend sums across stores.

Still need help?

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