LTV CM2: Lifetime Variable Margin Value

LTV CM2 measures the total variable margin (after COGS and fulfillment) a customer generates over their lifetime—their true contribution before marketing costs.

Formula

LTV CM2 = Total CM2 ÷ Customers

Formula Components

Metric	Definition
Total CM2	Variable margin from all orders
Customers	Count of unique customers

Metadata
Type	Currency
Data Source	Shopify, Upstack Costs
Aggregation	Average

Example

Your Shopify store has $480,000 total CM2 from 10,000 customers.

Component	Value	Calculation
Total CM2	$480,000	Variable margin
Customers	10,000	Unique buyers
LTV CM2	$48	$480,000 ÷ 10,000

How It Works

LTV CM2 shows the variable margin contribution per customer after accounting for product costs and fulfillment. This is the most practical LTV measure for setting marketing budgets because it represents what’s available to cover marketing costs.

When to Use

Scenario	Action
Marketing budget	LTV CM2 sets max allowable CAC
Channel profitability	Compare LTV CM2 to CAC by channel
Cohort analysis	Track how LTV CM2 develops over time
Unit economics	Core input to profitability models

Metric	Relationship
LTV CM1	Before fulfillment
LTV CM3	After marketing
CM2	Total variable margin
LTV:CAC	Acquisition efficiency

See all LTV metrics →