Explain how a company determines customer lifetime value and how a company can use this information to its advantage
What will be an ideal response?
Customer lifetime value (CLV) is the present value of all profits expected to be earned in the future from a customer. To calculate CLV, a company needs to know the customer average purchases per year, the profit margin earned on those purchases, the costs to service the customer, the customer retention rate, and the firm's discount rate. Once CLV is calculated, a company can identify customers who should be the target of the company's relationship marketing efforts. CLV can also help a company identify unprofitable customers who should be "fired."
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Coops: you get a _______________ from a corporation
Fill in the blank(s) with the appropriate word(s).
The difference between the price consumer's pay and the amount they would actually have been willing to pay to obtain the benefits is known as ____________
a. net value b. gross value c. consumer surplus d. moderate value e. consumer demand