Customer Lifetime Value
In the simple CLV formula, what factor represents how long how long someone remains a customer?
Years as a customer.
What does a company need to understand about its customers in step 1 of the marketing process?
Their needs.
If someone stays with a company for 5 years, what number would be used for the "years as a customer" part of CLV?
5
A person needs food because they are hungry. Is this a need or a want?
Need
A customer spends $10 per purchase, makes 4 purchases per year, and remains a customer for 3 years. What is their Simple CLV
120
($10*4*3)
Why should marketers understand customer needs before creating a product?
So they can create an offering that actually satisfies customers.
Customer A stays with a company for 2 years.
Customer B stays for 8 years.
Assuming everything is else is equal, which customer has the greater CLV?
Customer B
A customer needs.
Why can keeping a customer for more years increase their lifetime value?
They have more time to purchase and bring value to the company.
Before designing a marketing strategy, what should a company first understand about the marketplace and its customers?
Their needs.