Subscription economics look beautiful on a pitch deck and fragile in reality. The math depends on churn, and churn compounds: a 7 percent monthly churn rate means average customer lifespan of roughly 14 months, not the 24 or 36 months founders often assume. This calculator takes subscription price, COGS, fulfillment per shipment, monthly churn rate, acquisition cost, and processing fees, and returns contribution per shipment, expected lifespan in months, LTV, LTV/CAC ratio, and payback period. It is built for Shopify Plus subscription brands that need to stop quoting marketing-deck LTV and start quoting the real number that finance and investors will actually believe.
Contribution per Shipment
$24.65
Expected Lifespan
14.3 months
Lifetime Value (LTV)
$352.14
LTV / CAC Ratio
6.40×
Payback Period
2.2 months
Contribution per shipment is Subscription Price minus COGS minus Fulfillment per Shipment minus Payment Processing (Subscription Price multiplied by Processing Fee Percentage). This represents the dollars of contribution each recurring shipment generates after all variable costs. Expected lifespan in months uses the standard geometric-series approximation for churn: 1 divided by the monthly churn rate. At 7 percent monthly churn, expected lifespan is 1/0.07, or roughly 14.3 months — not the 24 or 36 months founders often assume. LTV is Contribution per Shipment multiplied by Expected Lifespan. LTV/CAC ratio is LTV divided by Acquisition Cost — industry standard health is 3.0 or higher. Payback months is Acquisition Cost divided by Contribution per Shipment, assuming monthly billing cadence. This model assumes constant monthly churn and a monthly billing cycle; if you bill quarterly or have cohort-variable churn, adjust the lifespan formula accordingly. It also does not include referral credits, pause-and-resume behavior, or upgrade/downgrade flows — subscription models with heavy flex dynamics need a cohort-based model, not a simple LTV formula.
At 7 percent monthly churn (typical for a well-run consumer subscription) and a 26 dollar contribution per shipment, LTV lands around 370 — against a 55 dollar CAC, that is a 6.7x ratio and a payback period near 2 months, which is excellent. At 12 percent monthly churn (more common for unproven categories) the same economics collapse: lifespan drops to 8.3 months, LTV to 215, and the LTV/CAC ratio to 3.9. At 15 percent churn, the business is structurally unprofitable against typical CAC levels. Churn is the single most sensitive variable in subscription economics and also the one most often quoted optimistically. The test founders should apply: take your best cohort's actual churn curve from month 1 through month 12 and model LTV from that, not from an assumed steady-state churn number. The difference between optimistic and realistic churn assumptions routinely swings LTV by 40 percent, which swings the fundability of the business.
Subscription margin erodes one shipment at a time, and the erosion is invisible until a cohort review weeks later. A raw material price increase, a freight zone shift, a new payment processor surcharge — any of these can quietly reduce contribution per shipment by a few dollars, and a three-dollar drop compounds across every shipment for every active subscriber. Agentis recomputes contribution per shipment per subscriber against live cost data, flags cohorts that drop below your profit floor, and in Shopify Plus subscription flows can block renewal billing for cohorts that have crossed into unprofitable territory until a pricing action is taken. The calculator tells you what your subscription LTV should be; Agentis makes sure each shipment actually delivers the contribution that assumption depends on.
LTV equals contribution per shipment multiplied by expected customer lifespan. Expected lifespan is approximately 1 divided by monthly churn rate — at 7 percent monthly churn, that is roughly 14 months. Use contribution, not revenue, to avoid overstating.
3.0 is the standard floor, 4.0 to 6.0 is healthy, and anything above 6.0 suggests you may be under-investing in acquisition. Below 3.0, the business will struggle to scale profitably.
Because it compounds. A 7 percent monthly churn gives 14 months of expected lifespan; 12 percent gives only 8 months. That 5-point churn gap roughly halves LTV and can turn a fundable business into an unfundable one. Measure actual cohort churn, not assumed steady state.
Agentis monitors contribution per shipment against live COGS, fulfillment, and processing cost, flags cohorts that fall below your profit floor, and can gate renewal billing for unprofitable cohorts in Shopify Plus subscription flows until pricing is corrected.
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Profit Governance
A systematic framework for enforcing profitability rules across every transaction in real-time, ensuring no order ships below acceptable margin thresholds.
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