Customer lifetime value (CLV) refers to the net profit attributed to the entire future relationship with a customer. It can be calculated simply as the annual profit contribution per customer multiplied by the average number of years they remain a customer. The document provides a quantitative example calculating the CLV of Patanjali customers over 8 years, showing increasing revenue, margins, and total profit as more customers are acquired and retained each year. Qualitative steps like membership cards, special offers, and online updates are suggested to improve customer retention and increase CLV.

1. CUSTOMER LIFE TIME
VALUE OF PATANJALI
MARUTHI DEEPAK
NIXALD GINESH
RIYA ASEEF
SHALINI
SMIRITI VARMA
UZMA SYED
VIVEK DIGWANI
09-08-2018MARKETING MANAGEMENT

2. CUSTOMER LIFETIME VALUE
• Customer lifetime value is a prediction of the net profit
attributed to the entire future relationship with a customer.
• The prediction model can have varying levels of
sophistication and accuracy, ranging from a crude heuristic to
the use of complex predictive analytics techniques.
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3. CALCULATING CUSTOMER VALUE
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• The simple customer lifetime value formula is
• Annual profit contribution per customer * Average number of years
that they remain a customer

4. QUANTITATIVE APPROACH FOR CALCULATING CLV OF PATANJALI
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YEAR
0
YEAR
1
YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8
NUMER OF
CUSTOMERS
100 120 140 160 180 200 220 240 260
REVENUE PER
CUSTOMER
100 105 110 115 120 125 130 135 140
VARIABLE
COST PER
CUSTOMER
50 52 54 56 58 60 62 64 66
MARGIN PER
CUSTOMER
50 53 56 59 62 65 68 71 74
ACQUISITION
PER CUSTOMER
10 10 15
TOTAL COST OR
PROFIT
40 53 56 49 62 65 53 71 74

5. CUSTOMER VALUE OF PATANJALI
• The brand promise have increased the customer reliability towards the
brand PATANJALI
• Patanjali has wide variety of products which help the consumers to get
products from the same brand.
• Profits of Patanjali obviously shows customers are retained and new
customers are acquired every year.
• This shows increase in Customer Value to the brand.
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6. QUALITATIVE STEPS TO IMPROVE CLV
• MEMBERSHIP CARDS ADDING BONUS POINTS.
• SPECIAL OFFER ON BIRTHDAY AND SPECIAL EVENTS IN
FAMILY.
• ONLINE UPDATES ABOUT NEW PRODUCTS AND
RECOMMENDATIONS TO RETAIN CUSTOMERS.
• BUNDLE OFFERS.
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7. CONCLUSION
• Acquiring new customer can cost five times more than satisfying and
retaining the current customers.
• According to 80-20 rule more than 80 % of company profit comes
from 20% of its top retained customer.
• Retaining valuable customer will increase CUSTOMER LIFETIME
VALUE.
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