The customers you acquire from different marketing channels are not equally valuable. Certain channels have customers with consistently high or low LTV. Ranking is below:

First, for credibility, the DTC e-commerce businesses I’ve co-founded or acquired have spent well over $100mm on paid marketing. And I’ve seen the detailed marketing stats for dozens of businesses.

And, for clarity, by more valuable customers I mean customers who have higher AOV, better retention / greater order frequency, purchase higher margin products, and refer a greater number of other customers.

Finally, this list obviously isn’t definitive and doesn’t apply to every business. It just gives a rough sense of what I’ve seen. However, the differences can be quite large–Hubble had a 4x LTV difference between top and bottom channels.

Here’s the list:

  1. Organic (friends and family referral)
  2. TV
  3. Podcast
  4. Search
  5. Facebook
  6. Instagram
  7. Snap
  8. Native
  9. Coupon code affiliate

I didn’t include every channel because some have inconsistent relative LTV. Those include influencer marketing, direct mail, radio, other affiliate, display, YouTube, and Pinterest. I’ve seen these all over the place.

A few notes: while it’s not a marketing channel per se, it’s pretty intuitive to me that organic is the highest LTV. A recommendation from a current customer you trust is an incredible, usually unbiased endorsement and would likely cause a new customer to take greater risk by placing a larger first order or giving a brand another shot if they don’t like it initially.

And last place is also intuitive. If you’re going to a coupon code site to get a leaked code, you’re probably very price-sensitive. Plus, the coupon itself hurts LTV.

Something else that strikes me is channels in which you can really tell a story about your brand–like TV or podcasts–generally have higher LTV. Channels that are, let’s face it, a bit scammy like native understandably have worse customers.

Finally, I don’t think it’s an accident that channels which generally cater to an older audience are higher LTV–think TV vs. Snap. It’s not always true but I’ve usually seen older customers–who have greater disposable income, are potentially more brand loyal–have higher LTV.

Of course, the value of the customers you acquire through a channel is only part of the puzzle. If the cost per acquisition on a high LTV channel is disproportionately high (CAC to LTV), you’re out of luck. But I think in general the market to be pretty efficient: TV is usually more expensive than Facebook.

Think my list is wildly off base? Think I got it right? Have thoughts on a channel I didn’t rank? Let me know in the comments!