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Customer Lifetime Value - The Path to Profitability answers the following questions:
· What is the value of a customer?
· Can customers be evaluated based only on their past contribution to the firm?
· Which metric is better in identifying the future worth of the customer?
These are the questions a firm has to deal with before assessing the value of its customers. The author shows that the value of a customer is the value the customer brings to the firm over their lifetime. Therefore, we need a metric that can objectively measure future profitability of the customer to the firm. Customer lifetime value (CLV) helps managers make informed business decisions.