Customer Lifetime
Value
Value
In the Simple CLV formula, what factor represents how long someone remains a customer
Years as a customer
A company discovered that customers want faster delivery. What has the company learned about its customers?
Customer 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
Why should Marketers understand customer needs before creating a product?
So Marketers create a product that actually satisfies customer needs.
A customer spends $10 per purchase, makes 4 purchases per year, and remains a customer for 3 years. What is their CLV
What is 120
($10*4*3)
Customer A stays with a company for 2 years. Customer B stays for 8 years. Assuming everything else is equal, which customer has the greater CLV?
Customer B
CLV= Average Purchase Value * Number of Purchases per year *
Years as a customer.