Customer Lifetime Value

CLV or Customer Lifetime Value-focused marketing can create a much more centralized and effective marketing strategy to improve your profit margins over time. This is clear in the relationship that loyal customers create with brands and businesses that they rely on, as their consistent return is more profitable than always trying to find new customers and increasing your Customer Acquisition Cost (CAC). This can often be calculated using the following principle: Customer Lifetime Value= Number of transactions per year x expected retention period (in years) x profit margin x Average sale value.

Tags: , ,