Is your organization pouring out a large budget for sales & marketing activities and not seeing the returns? Is your organization focused solely on short term cash flows rather than long term profits? Is your organization unaware of how to calculate the potential profit of each client you bring in the door? If you answered yes to any of these questions, learning what customer lifetime value (CLV) is and how to calculate it may benefit to your organization.
CLV is a crucial metric that most organizations overlook mainly because its definition and purpose are not entirely known. Understanding the monetary value each customer represents to your organization can help you budget correctly for your business needs, strategically plan your marketing initiatives and improve long-term relationships with your customer base.
This brief 5-page guide details the definition of CLV, the advantages of calculating CLV and the standard formula for calculating CLV.
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