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What Is LTV, Really?
Customer Lifetime Value (LTV) is the total amount of money a customer is expected to spend with your brand over the course of their relationship with you. Not just what they spend today. Not what they might spend if they say, really loved your Valentine’s Day sale, but instead their full lifetime value.
Why LTV Is the Metric That Matters
Most ecommerce brands are laser-focused on ROAS which can be a reflection of just the first conversion: get the click, get the sale, high-five the team. But if you’re only measuring success by the first purchase, you’re only seeing one chapter of the story and you’re limiting your growth and profitability.
LTV zooms out. It shows you how valuable a customer actually is over time - and that’s the number you want to build your strategy around.
For starters, it helps you set realistic Customer Acquisition Cost (CAC) targets. If your LTV is $350, you can afford to spend $100 or even $150 to acquire a customer and still come out ahead. But if your LTV is only $60 and you’re dropping $90 on paid ads? That’s not a business - that’s a bonfire.
Short-Term ROAS vs Long-Term Profit (LTV at Work)
You sell a product with an average Lifetime Value (LTV) of $350.
You spend $100 on ads to acquire a new customer.
On the first purchase, the customer buys a product worth $70.
Your initial Return on Ad Spend (ROAS) is:
$70 ÷ $100 = 0.7x
(You’re losing money on the first sale.)
At first glance, that looks like a bad deal.
But here’s the bigger picture:
- That same customer receives your welcome email flow.
- A week later, they return and buy a bundle worth $120 (email cost: $0.01).
- After a few weeks they see a retargeting ad for $10 and they spend another $160. Blend customers don’t need to worry about this.
- Over 3 months, they’ve spent $350 and you’ve spent only $110 to get and keep them.
Your true blended ROAS over time becomes:
$350 ÷ $110 = 3.18x
Now you’re profitable and scaling smart.
Some subscription heavy brands even opt out of first order profitability in the name of aggressive new customer acquisition. In the example above their CAC (Customer Acquisition Cost) is $100, at first glance you might hear alarm bells, but after realising that the new customer has returned to purchase again from you, that $100 CAC is actually healthy and quite profitable.
LTV also tells you where your leaks are. Low LTV often points to a retention problem, a lack of repeat purchases, site conversion issues, poor email flows or perhaps post sale service.
Where to Find the Numbers
To calculate LTV, you’ll need a few data points - most of which you already have.
Start with your Average Order Value, which your ecommerce platform (like Shopify) likely shows right on your dashboard. Purchase frequency can be calculated by dividing the number of orders by the number of unique customers over a time period - say, the past 12 months. For customer lifespan, you can look at historical purchasing data to see the average time between a customer's first and last order. If you're a newer brand, make an educated estimate based on your category - consumables like skincare or pet food usually have higher lifespans than big-ticket items like mattresses.
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You can also export your raw orders - and use an LLM like ChatGPT “Using this export of my customers from my ecommerce store calculate the lifetime value per customer”.
You can also try more purpose built SaaS tools like Lifetimely.io.
Pro tip: If you're just getting started and don’t have a ton of data, start simple and refine as you grow. LTV is a living metric - it should evolve as your business does.
How to Grow Your LTV (Without Working Twice as Hard)
The good news? LTV isn’t fixed. It’s something you can improve. And when you do, every customer becomes more valuable - without increasing your ad spend.
Start by improving the post-purchase experience. Make sure customers feel appreciated, informed, and excited to buy again. A thoughtful email flow, fast shipping, or even a small surprise in the box can go a long way.
Next, look for ways to increase repeat purchases or increase AOV. Offer bundles, subscriptions, or reorder nudges based on past behaviour. Think like Amazon’s “buy again” button - but smarter and more personal.
Segment your audience. High-value customers might warrant a VIP experience, while new customers might need a little extra love before they’re ready to commit.
Talk to your customers. We always say it isn’t just about the ads. The best brands are talking to their customers constantly via all of their social channels.
And most importantly - plug the holes. If customers are churning after one purchase, find out why. Poor product experience? Shipping issues? Confusing returns? Call them - ask them, you’ll be surprised by the results. Every fix adds up.
In a world of vanity metrics - likes, impressions, 5x ROAS screenshots - LTV is one metric that really matters. It gives you clarity, direction, and confidence to grow a business that lasts.
The ecommerce brands that scale sustainably aren’t just the ones who win the first sale. They’re the ones who make every customer count - again and again.
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If you’re running an ecommerce brand, chances are you’re juggling a lot - product, fulfillment, customer support, creative, and of course, marketing.
But when it comes to performance marketing, too many brands obsess over the wrong metrics. Vanity metrics like ROAS might make you feel good, but they won’t help you grow profitably & sustainably.
At BlendAI, we believe in data that drives decisions. In this blog, we break down 5 of the most important performance marketing metrics ecommerce founders should track - so you can scale profitably, confidently, and with clarity.
1. Customer Acquisition Cost (CAC)
What it is: How much you’re spending to acquire one customer.
Formula:
CAC = Total Marketing Spend / Number of New Customers
Why it matters: If you don’t know your CAC, you don’t know how much you can afford to spend to grow. It’s your north star for sustainable scaling.
💡 Pro tip: Monitor CAC across channels - Facebook, Google, TikTok - to spot what’s working and what’s burning cash.
2. MER (Marketing Efficiency Ratio)
What it is: A holistic view of your marketing efficiency across all channels.
Formula:
MER = Total Revenue / Total Marketing Spend
Why it matters: MER shows you how efficiently your entire marketing budget is driving revenue. Unlike platform-specific metrics or ROAS, it reflects real-world performance and takes all channels into account.
📊 Blend AI tip: We love MER for its simplicity and honesty. It cuts through attribution noise and shows real business impact. We recommend you measure it closely and consider it heavily when scaling.
3. Lifetime Value (LTV)
What it is: How much a customer spends with you over their lifetime.
Formula:
LTV - Average Order Value × Purchase Frequency × Retention Period
Why it matters: If your CAC is $60 but your LTV is $300, that’s a great trade. If your CAC is higher than LTV - you’re losing money and need to re-evaluate immediately. A high LTV means you can afford to outspend competitors to acquire customers and increase your brand’s profitability by influencing repeat purchases.
💭 Remember: You did all of that hard work acquiring the customer, make it easier for yourself and influence repeat purchases.
4. Conversion Rate (CVR)
What it is: The percentage of users who purchase after visiting your website or clicking on your ad.
Formula:
CVR = (Conversions / Sessions or Clicks)
Why it matters: You can have a great Link Click Through Rate (CTR) on your ads, but if your landing page or checkout is leaky, your funnel will underperform. By looking at your CVR and ad performance metrics separately you’ll be able to figure out where the improvement is needed. Either your ads are poor, your website is poor or your targeting is way off.
🛠️ Fix the funnel: Use heatmaps, A/B tests, and Conversion Rate Optimisation (CRO) tools to plug the leaks in your path to purchase. For a great free heatmap and screenrecording tool, try Microsoft Clarity.
5. Contribution Margin
What it is: The percentage of revenue that remains after covering variable costs, which contributes to covering fixed costs and generating profit.
Formula:
Contribution Margin (%) = [(Revenue – Variable Costs) / Revenue]
Why it matters: A healthy contribution margin is crucial for profitable growth. It shows how efficiently your business turns sales into actual profit, beyond just covering production and delivery costs. A strong contribution margin gives you more breathing room to invest in marketing, operations, and growth initiatives without sacrificing financial health.
💸 Efficiency matters: Focus on optimizing product pricing, reducing variable costs, and improving operational efficiency to maximize your contribution margin.
Examples of variable costs:
- Product costs (ingredients, packaging, manufacturing)
- Shipping and fulfillment costs
- Credit card/payment processing fees
- Customer discounts and refunds
- Commissions paid per sale
Tracking the right performance metrics isn’t just about reporting - it’s about making smarter, faster decisions that actually grow your ecommerce business and being able to spot the areas of weakness along the customer journey. With tools like Blend AI, the guesswork is gone and the attribution is clean.
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If you aren’t harnessing your store data: It’s Costing You
Between iOS 14 updates, browser restrictions, and the death of third-party cookies, ecommerce brands are flying blind and most of them don’t know it.
Marketing platforms are struggling to get clean signals, attribution is messy, and you’re probably sending out much fewer emails than you should be - all while missing out on high-intent customers.
That’s where server-side tracking comes in. It’s not just a tech upgrade - it’s a massive profitability unlock.
What Is Server-Side Tracking (and Why Should You Care)?
Traditional tracking tools - like Meta Pixel or Google Analytics - rely on the browser (the user’s device) to send data. That’s called client-side tracking, because the data is collected and sent from the client - meaning the phone, tablet, or laptop your customer is using when they visit your site.
But this method has become increasingly unreliable due to:
- iOS and browser updates
- Cookie loss and data delays
- Ad blockers
- Privacy regulations
Server-side tracking, on the other hand, collects data directly from your server - the backend of your ecommerce store (where the logic, transactions, and customer database live).
That means it’s:
✅ More accurate
✅ Less affected by browser rules
✅ Able to enrich and send higher-quality data back to your platforms
This results in better targeting, better retargeting, and ultimately more revenue & better profitability.
How Server-Side Tracking Increases Ecommerce Profitability
Here’s how ecommerce brands are using server-side tracking tools to scale smarter and boost margins:
1. Identifying Anonymous Visitors (and Turning Them into Buyers)
Roughly 70-90% of your website traffic is anonymous - especially from mobile.
With client-side tracking, those visitors remain untrackable. But server-side tools can:
- Use first-party data to match activity to known users
- Enrich data using email interactions, session behavior, or even customer lookups
- Trigger email flows and retargeting based on real behavior, not guesswork such as abandoned carts or abandoned checkouts
Result: You re-engage people who would’ve been lost, and feed your marketing channels with more accurate data.
2. Feeding Better Data Back to Ad Platforms
Meta, Google, TikTok - they all depend on your site’s tracking to optimize ad delivery.
Server-side tracking ensures that purchase events, add to carts, checkouts, pageviews, and conversions are passed back reliably - even if the pixel fails. This helps:
- Improve lookalike audience quality
- Enhance ad relevance and reach
- Increase performance and reduce CAC
3. Enhancing Retargeting Campaigns with Richer Data
Retargeting is only as good as the data you have.
When server-side tracking is integrated with your email and SMS platforms (like Klaviyo, Postscript, etc.), you can:
- Send browse abandonment flows to more users
- Trigger post-purchase and win-back campaigns more precisely
- Segment based on actual behavior, not assumptions
Result: More personalized messages, higher open and conversion rates, and better retention without extra ad spend.
4. Unifying Your Data for a Clearer View of the Customer Journey
With server-side tracking, you get a single source of truth. You can see:
- Which channels are driving real conversions
- How users behave across multiple sessions
- What behaviors correlate with higher LTV
That insight helps you make better decisions, faster - without waiting for your agency to piece together UTM spreadsheets.
Better Tracking = Better Profit
As growth becomes more expensive, data accuracy becomes more valuable.
Server-side tracking helps ecommerce founders:
- Stop leaking valuable customer data
- Improve retargeting performance
- Increase Performance and customer LTV
- Build a more resilient, profitable growth engine
If you’re serious about scaling smart - not just scaling fast - this is the infrastructure upgrade that will actually move the needle.
Curious how much revenue you're leaving on the table with broken tracking?
Tools like Pulse by Blend AI can help you in just a few clicks.
Things are moving quickly at the intersection of eCommerce and AI, the demand for compelling and effective ad creatives has never been higher. Fortunately, advancements in AI mean brand owners and marketers with minimal expertise in design, marketing, or media buying can compete with the bigger teams. 🚀
With the following AI tools, one person teams can own their entire creative process. No more agencies, no more costly mistakes. Here are our top five AI-powered tools you can use today to revolutionise your creative process:
1. Icon: The AI Admaker
First up is Icon. It streamlines your ad creation by combining the capabilities of AI with a super user-friendly interface. Think of it as ChatGPT meets CapCut for ads. You can generate winning ads in minutes and significantly reduce the time and cost traditionally associated with making ad creative. Icon offers features like AdGPT for scriptwriting and AdCut for video editing, making it an all-in-one winner for ad creation. You didn’t hear this from us but It’s time to call your creative agency and make the switch…
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2. ChatGPT's Image Generation
OpenAI's ChatGPT has levelled up - big time. Not only can it generate detailed and realistic images from text prompts, but it can now also understand and interpret the content within images. That means you can upload a photo of your product, and ChatGPT will actually analyze it - picking up on details like colors, layout, context, and even text - before helping you craft the perfect ad creative.
Want a clean, studio-style shot? A vibrant lifestyle visual? A meme-style ad for social? Just describe what you’re after in plain English, and ChatGPT will generate high-quality statics ready for your campaigns.
This makes the creative process incredibly fast and user-friendly. In under 10 minutes, you could go from raw product image to a fully fleshed-out ad - designed, refined, and ready to launch across your marketing channels with BlendAI. Go ahead, I’ll start the timer. ⏱️
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3. Maker.ai: Turn Products Into Pro-Level Visuals, Instantly
If you've ever spent hours coordinating a product photoshoot - or worse, paid big bucks for results that still needed edits - this one’s for you. Maker.ai eliminates all of that. With a single product image, Maker uses AI to generate polished, professional-grade images that look like they came straight out of a high-end studio.
You don’t need a camera, a designer, or a creative team. Simply upload your product photo, choose your vibe - whether it’s sleek and minimal or lifestyle-driven - and Maker generates multiple high-quality options within seconds. They don’t use cookie-cutter templates either; each output is tailored and adaptive, so your brand still stands out.
Perfect for ad creatives, website visuals, email banners, or social content, Maker.ai helps you scale creative production without compromising on quality. It’s like having an on-demand creative team - one that never misses a deadline and always gets the aesthetic just right. Whether you're launching a new product or just refreshing your visuals, Maker puts your brand’s best face forward, effortlessly.
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4. MagicBrief: Get Inspired & Manage your Creative Process
Even with AI handling the ad creation, someone’s still gotta steer the ship creatively. That’s where MagicBrief steps in. It’s like your creative brain - on AI. MagicBrief helps you stay inspired by identifying top-performing ads from across the market, then lets you build and manage briefs for your own brand’s ads with zero fluff.
Whether you're working solo or with a team, it keeps your creative process organised and your feedback loop tight. You can easily see what’s working, why it’s working, and what to test next.
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5. HeyGen: AI Video Generator
HeyGen is one of our favourites. It’s an AI-powered video generator that enables users to create unlimited videos without the need for a camera. It offers a range of customisable avatars and supports features like video translation and localisation, making it ideal for global marketing campaigns. No need to find UGC talent, send out product or wait to see if they actually end up sending you a video. With HeyGen, users can produce engaging video content in minutes and make quick changes to create ad variations for testing and maximised results.
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By utilising these AI tools and BlendAI, your brand can make & launch creatives seamlessly and quickly - from ideation to execution - without any expertise. Allowing you to focus on your creative volume and letting BlendAI optimise your media buying.
Scaling an eCommerce business is no easy feat. As with anything else, learning from leaders in the space can help you avoid costly mistakes & learn tricks to hit your goals quicker. In order to scale in a reliable and profitable manner, the Blend AI team are big believers in attending, learning & networking at conferences.
Below is a list of the top ecommerce marketing conferences that have been announced for Australia in 2025. As the list grows, we will continue to expand this list.
eTail Australia 2025
Dates: 25-26 February 2025
Location: Sheraton Grand Sydney Hyde Park, Australia
eTail Australia is the leading meeting place that brings together Australia and New Zealand's foremost retail leaders. Elevate your retail strategy at eTail Australia 2025, where innovation meets actionable insights! This year’s event features keynotes from Australia’s leading economists exploring economic outlooks and global trends. Discover a systematic approach to bridging tech gaps, attend spotlight case studies from top retail brands, and gain inspiration from Asia’s most thought-provoking retail leaders. Don’t miss guided networking sessions designed to connect you with industry peers and spark collaborations.
Some key names on the lineup of speakers set to speak this year include:
- Jay Bonaretti - CEO, Amino Z
- Rajesh Thadani - Executive Director AP e-commerce, Lenovo
- Stephen Walters - Chief Economist, Business Council of Australia (BCA)
- Lydia Bertini - Head of Customer & People, Miss Amara
- Eric Bruzek - Founding Partner, Amerinda Advisory
Sydney SEO Conference 2025
Dates: 20 - 21 March 2025
Location: Amora Hotel Jamison, Sydney Australia
Get ready for one of the most anticipated digital marketing events of the year! Prosperity Media’s 2025 SEO Conference is returning to Sydney, bringing together industry experts to share actionable strategies for boosting your business’s online visibility. This year’s agenda is packed with insights on cutting-edge SEO techniques for retail and eCommerce, as well as content marketing, affiliate marketing, and leveraging AI in search optimization. Connect with SEOs, Digital Marketing Managers, PPC professionals, Affiliate Marketers, and eCommerce leaders to exchange ideas, build partnerships, and stay ahead in the fast-evolving world of digital marketing.
Some key names on the lineup of speakers set to speak this year include:
- Aleyda Solis - Founder, Oranti
- Cyrus Shepard - Founder, Zyppr SEO
- Kyle Roof - Co-Founder, POP/IMG
- Shane Dutka - VP SEO, Three Ships
- Sally Mills - SEO, InfoChoice Group
Retail Leaders Forum
Dates: 26-27 March 2025
Location: Sofitel on Collins Melbourne
Discover the latest in retail innovation at the Retail Leaders Forum 2025 in Melbourne. The Retail Leaders Forum 2025 is where the industry’s most influential minds come together to explore solutions to today’s biggest challenges in retail. Focused on actionable strategies and transformative ideas, this event empowers leaders with the knowledge, skills, and networks to drive business growth, adapt to complexities, and foster innovation in an ever-evolving market. Prepare to gain insights that will redefine your approach to leadership and retail success.
Learn from industry leaders as they tackle sustainability, leadership, and the future of eCommerce. Some key names on the lineup of speakers set to speak this year include:
- Michael Schneider - Managing Director, Bunnings Group
- Mirja Viinanen - CEO & Chief Sustainability Officer, IKEA
- Jack Gance - Chairman & Co - Founder, Chemist Warehouse Group
- Pual Tinkler - Vice President ANZ, lululemon
- Don Mejj - Group Chief Executive Office & Managing Director, Domino's Pizza
- Dr Oliver Vogt - CEO Transcend Retail Solutions, Tesco
iMedia Retail Summit Australia
Dates: 30 April - 2 May
Location: Sheraton Grand Mirage, Gold Coast
Join Australia’s top retail and eCommerce professionals at the iMedia Retail Summit 2025 from April 30 to May 2 at the Sheraton Grand Mirage, Gold Coast. This exclusive 2.5-day event connects 200 retailers with 200 leading technology and solution providers. Featuring 25+ expert keynotes, the summit offers invaluable insights into retail innovations, economic trends, and cutting-edge solutions shaping the industry. Don’t miss this unparalleled opportunity to network and drive your business forward!
Retail Fest AUS
Dates: 28-30 May 2025
Location: Gold Coast Convention Centre, Gold Coast
Retail Fest AUS offers a valuable opportunity for business professionals seeking knowledge, networking, and valuable content to elevate their ventures. Attendees will gain actionable insights from industry-leading speakers, participate in immersive workshops like the Maropost Success Summit, and connect with exhibitors showcasing the latest innovations in retail.
Key highlights include the Retail Innovators Awards Luncheon, the eBay Seller Scale-Up Workshop, and wellness-focused activities such as the Retailer Wellness Walks. Designed for digital leaders, e-commerce managers, and retail entrepreneurs, this event promises strategies for hyper-personalization, leveraging emerging technologies, and doubling profits in a rapidly evolving market.
Some key names on the lineup of speakers set to speak this year include:
- Vince Lebon, Founder, CEO & Design, Rollie Nation
- Tara McKeon, Director, Proud Poppy Clothing
- Mike Smith, Founder, Zero Co
- Nathan Anthony, Co-Owner, Muscle Nation
Digital Marketers Australia
Dates: 5 - 6 May 2025
Location: Sydney,Australia
Take your digital marketing game to the next level with Digital Marketers Australia.
Digital Marketers Australia is the place where Australia's top digital marketers gather to learn, network, and grow. From absorbing mastermind-level content on stage to exploring an exhibition floor overflowing with career-advancing opportunities, this conference is your ticket to push your career forward on the Gold Coast!
The conference will be focusing specifically on digital marketing to help grow your business or client’s businesses. Watch speaker’s breakdown campaigns step by step, so you can roll out strategies that are working right now.
Online Retailer Conference & Expo
Dates: 23-24 July 2025
Location: ICC SYDNEY
The Online Retailer Conference & Expo is a must-attend event for professionals seeking a tech-led future in retail.
Join the Online Retailer Conference & Expo 2025 in Sydney to explore cutting-edge eCommerce trends, digital marketing strategies, and supply chain solutions. With key speakers from Shopify, Klarna, and eBay, this is the ultimate event for retail innovation and networking. Don’t miss out on Australia’s premier eCommerce event!
iMedia B2B eCommerce Summit
Dates: 29-31 Oct 2025
Location: Sheraton Grand Mirage, Gold Coast
The iMedia B2B eCommerce Summit 2025 is Australia’s premier event for B2B brand manufacturers, eCommerce experts, and wholesale distributors. Over three action-packed days, attendees will connect with 200+ industry leaders, engage in face-to-face business meetings, and gain actionable insights from roundtable discussions and world-class presentations. This is the ultimate platform to explore strategies, best practices, and innovative solutions for thriving in the B2B eCommerce landscape.
eTail Connect
Dates: 23-24 September 2025
Location: Australia
Join senior eCommerce and digital marketing executives at eTail Connect Australia 2025, happening September 23–24 on the Gold Coast. This exclusive event connects top retailers with innovative solution providers through high-impact networking, one-on-one business meetings, and engaging presentations. Discover the latest trends, technologies, and strategies driving eCommerce success in Australia.
