Customer lifetime value (CLV) concept
Explain the customer lifetime value (CLV) concept. Thinking about a specific firm, how could it use the concept of CLV to increase the overall profitability of its customer base?
Customer lifetime value (CLV) is an ability that company’s have that allow them to forecast the relationship they have between their customers. With the knowledge of knowing what the cost to acquire, maintain and service a customer, then a marketer can make a sound decision about how to spend. This allows them to have a better chance at marketing to the customer. CLV concept gives a business is a picture that shows where they make money from a customer and where they stand in the relationship that is formed.