Which of the following statements BEST encapsulates the underlying logic of customer lifetime value?
A) Companies should continually strive to increase the value of its products and services for the lifetime of a defined market segment.
B) Companies should focus their efforts on locating and serving the interests of the most profitable market segments.
C) Companies should seek to profit from both individual transactions and the overall relationship with a customer.
D) Companies should use de- marketing to reduce the size of less profitable market segments.
E) Companies should be prepared to make little profit from individual transactions and instead focus on the value generated by the term of its relationship with a customer.

Question

Quizplus · Accepted Answer

Customer lifetime value is the total value a customer brings to a company over the duration of their relationship. It emphasizes the importance of long-term customer relationships, rather than just focusing on individual transactions or maximizing profit from a specific market segment. Therefore, option E is the best choice as it suggests that companies should prioritize the overall value generated from maintaining long-term relationships with customers, even if it means making little profit from individual transactions.

Which of the Following Statements BEST Encapsulates the Underlying Logic