BUSINESS ADMINISTRATION
CUSTOMER RELATION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Customer lifetime value
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Customer purchase value
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Customer costs incurred
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consumer relations
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Detailed explanation-1: -Definition: Customer Lifetime Value or CLTV is the present value of the future cash flows or the value of business attributed to the customer during his or her entire relationship with the company.
Detailed explanation-2: -Customer lifetime value is the total amount of money a customer is expected to spend with your business, or on your products, during the lifetime of an average business relationship.
Detailed explanation-3: -What is customer lifetime value (CLV)? The customer lifetime value formula will tell you what the average customer is worth to your business throughout the course of the relationship. The typical formula used to calculate customer lifetime value is Customer lifetime value = customer value x average customer lifespan.
Detailed explanation-4: -NPV, or net present value, is how much an investment is worth throughout its lifetime, discounted to today’s value. The formula for NPV is often used in investment banking and accounting to determine if an investment, project, or business will be profitable in the long run.
Detailed explanation-5: -However, some companies will distinguish between CLV and LTV in terms of granularity. In those cases, LTV refers to the average customer lifetime value across the entire customer base, whereas CLV refers to lifetime value for an individual account.