Lifetime Value (LTV)

The Lifetime Value (LTV) template measures how much customers spend over time for specific brands or categories within a set time period. This helps partners understand the long-term value of customers who buy their products on Instacart.

The template tracks first-time buyers during a specific window and calculates their total spending over the following 90, 180, or 360 days. Results can be grouped by brand, department, super category, or category. Each row in the results represents an aggregated group of at least 100 users.

You can perform the following actions with this template:

• Analyze customer spending starting from their first purchase.
• Select a lookback window of 90, 180, or 360 days for the analysis.
• Focus on specific brands or product categories for analysis.
• View spending data at different levels, such as brand or category.

Run the query

Use the following query to calculate the LTV:

set cleanroom_name = 'CLEANROOM_NAME';
call samooha_by_snowflake_local_db.consumer.run_analysis(
  $cleanroom_name, -- cleanroom name
  'ltv',
  [], -- Consumer tables (none needed)
  [], -- Provider tables (none needed)
  object_construct(
    'end_date', '2025-03-31',
    'lookback_window', '90 days',
    'brands', ['BRAND_NAME_1'],
    'categories', ['CATEGORY_NAME_1'],
    'aggregation_level', ['delivered_entity_brand']
  )
);

Parameters

Parameter	Description	Data type	Allowed values	Required or optional
end_date	Specifies the end date for the analysis in YYYY-MM-DD format.	string	Current or past date, but no earlier than 3 years. Use the following format: YYYY-MM-DD.	required
lookback_window	Defines the time period for calculating LTV.	string	"90 days", "180 days", "360 days"	required
aggregation_level	Determines how results are grouped.	array	"delivered_entity_brand", "delivered_entity_department", "delivered_entity_super_category", "delivered_entity_category"	optional
brands	An array of brand names to apply to a filter.	array	Brand names as they appear in the catalog	optional
categories	An array of categories to apply to a filter.	array	Category names as they appear in the catalog	optional

Result

Result	Description
PARAMS_JSON	A JSON object detailing all input parameters
AGGREGATION_LEVEL	The specified dimensions for aggregation
LTV	The average lifetime per customer, in dollars

Example result

PARAMS_JSON	DELIVERED_ENTITY_BRAND	LTV
{"end_date":"2025-02-01","lookback_window":"90 days", … }	BRAND_NAME_1	45.67

Data collection and classification

The LTV template organizes and categorizes the data using the following methods:

• Minimum user threshold. Results are only returned when the cohort contains at least 100 unique users.
• Date validation. Prevents analysis of data that is too old (>3 years) or in the future.
• Aggregated results. Individual customer data is never exposed; only aggregated metrics are returned.
• Parameter validation. Invalid parameters result in empty result sets rather than errors.
• Secure processing. All calculations are performed within clean room boundaries.

Best practices

Consider the following best practices when running this query:

• Choose end dates that align with your business reporting cycles.
• Use 90 days for short-term analysis, and 360 days for comprehensive LTV measurement.
• Apply brand and category filters to focus on specific product areas.
• Select aggregation levels that match your business hierarchy and reporting needs.

Methodology

This template employs various methodologies to gather, analyze, and interpret data.

Cohort-based method

The LTV calculation uses a cohort-based methodology that measures customer value precisely.

• Cohort definition. Selects customers who purchased for the first time in a specific brand or category during a set time period.
• Spend tracking. Calculates how much each customer in the cohort spends over the lookback window.
• Average calculation. Computes the average spending across all customers in the cohort.

Calculate LTV

LTV adds up the total spending for all customers in a cohort over the lookback window., then divides by the total by the number of customers in the cohort.

The following image shows the LTV formula:

Where:

• n is the number of customers in the cohort.
• TotalSpend i is the total spend for customer i over the lookback window.

Analyze LTV results

When interpreting LTV results, consider the following factors:

• Seasonality. Results may be affected by seasonal buying trends.
• Lookback window. Longer lookback windows give a fuller picture but may include fewer recent cohorts.
• Category focus. Using brand/category filters ensures the analysis focuses on specific products.
• Customer lifecycle. New and existing customers can behave differently and affect the results.

Limitations and considerations

Keep in mind the following limitations and considerations when using this template:

• Business context. Results should be interpreted within marketing activities and business cycles.
• Data completeness. LTV accuracy depends on complete transaction history within the lookback window.
• Market dynamics. External factors may influence customer spending patterns.