Explain how a company determines customer lifetime value and how a company can use this information to its advantage
What will be an ideal response?
Customer lifetime value (CLV) is the present value of all profits expected to be earned in the future from a customer. To calculate CLV, a company needs to know the customer average purchases per year, the profit margin earned on those purchases, the costs to service the customer, the customer retention rate, and the firm's discount rate. Once CLV is calculated, a company can identify customers who should be the target of the company's relationship marketing efforts. CLV can also help a company identify unprofitable customers who should be "fired."
You might also like to view...
Adjusting leadership styles is based on the assumption that ______.
A. followers’ skills and motivation vary over time B. leaders have to develop basic skills prior to assessing follower needs C. followers’ skill level stays the same, whereas motivation level varies D. leaders adjust their styles to the behavioral styles of followers
As a business grows or evolves it is necessary for the accounting system to
A) stay the same according to the consistency principle. B) completely change computerized accounting systems and simplify to a manual system. C) completely change all manual accounting systems to one that is computerized. D) adapt or modify to meet the specific needs of the business.
Firms are typically more successful when they focus on opportunities that build on their strengths relative to those of their competition.
Answer the following statement true (T) or false (F)
The ________ overhead rate method uses a different overhead rate for each production department.
Fill in the blank(s) with the appropriate word(s).