What is customer lifetime value and why does it decide everything?

The gross profit one customer produces across every order they will ever place. It decides everything because it sets the most you can afford to pay to acquire one, which sets what marketing is possible.

In more detail

Two stores selling the same thing at the same price can have lifetime values a factor of four apart, purely on repeat rate. The one with the higher figure can outbid the other for every customer indefinitely and still make more money.

What to do about it

Repeat customers are the whole game. Winning a customer costs money; selling to them again costs almost nothing.

Most of the money in ecommerce is made in unglamorous categories bought regularly, not in the ones that photograph well.

Selling online is not passive income. It is a business with stock, customers and a support inbox, and anybody describing it as passive is selling a course.

The mobile app angle

This is where an app earns its place — it exists to make the second and third purchase easier, which is where the profit is.