Question

the case for maximizing long-term customer profitability is captured in the concept of customer lifetime value. How is customer lifetime value calculated​

Answer 1

Answer: CLV or customer lifetime value defines the net present value of the flow of future profits anticipated over the lifetime purchases of the consumers. CLV should include the following: Add: Profit from a sale Average age of a customer Number of sales per consumer every year Average expected lifespan of a consumer Subtract: Suitable discount rate Costs of attracting a single consumer Servicing one consumer Selling one consumer Moving ahead, companies would transform by starting to undertake a long-term perspective instead of a short-term. No more considering a consumer like a transaction...

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