Understanding Core Terms in Your Reports

Definitions

• Cohorts

  A cohort is simply a group of customers who all did something during the same timeframe, like placing their very first order in November. That whole group would make up the November cohort.

• Cohort Analysis

  Cohort analysis is the practice of taking a big pool of customer data and breaking it down into smaller, time-based groups. This makes it easier to see patterns in how different groups of customers behave over time, without all the noise you’d get if you lumped everyone together.

• Customer Acquisition Cost (CAC)

  CAC is how much you spend in marketing to bring in a new customer. In the LTV Report, it’s calculated as:

  
  

  Total marketing spend ÷ number of new customers

  Lifetimely calls this front-loaded CAC, since it only reflects the cost of acquiring new customers and doesn’t include spend for reactivating past ones.

  • Where the data comes from: All CAC data is pulled from Shopify’s Customer Visits data. Lifetimely doesn’t process UTM parameters directly.
  • GDPR note: If you sell in the EU, you’ll need to turn on Shopify’s GDPR consent tools. This ensures Shopify can capture the attribution data that Lifetimely relies on.

• Lifetime Value (LTV)

  In academic terms, LTV is the present value of all future cash flows a customer generates. For ecommerce, though, it’s more practical to define it as:

  
  

  How much a new customer spends in a set period of time (e.g., 3 months, 2 years).

How they differ

• Cohorts vs Segments
  • Cohorts are grouped by time (e.g., all customers who made their first purchase in January).

  • Segments are grouped by attributes (e.g., all customers in Paris, or all subscribers).

    A single segment can contain multiple cohorts, depending on when those customers first purchased.

Limitations

• CAC data: Because CAC is based entirely on Shopify Customer Visits, you won’t see UTM parameter data here.
• GDPR compliance: If your store operates in the EU, make sure Shopify’s GDPR consent tools are enabled. Otherwise, some customer attribution data may not be captured correctly.