Customer lifetime value is equal to the net present value of the stream of profits over a customer's lifetime plus _____.
A) the costs associated with satisfying that customer
B) the costs associated with keeping that customer for more than 10 years
C) the retention rate for all customers
D) opportunity cost saved from having loyal customers
E) the worth attributed to the equity a good customer can bring

Question

Quizplus · Accepted Answer

Customer lifetime value not only includes the stream of profits over a customer's lifetime but also takes into account the potential equity that a loyal customer can bring. This can include referrals and positive word-of-mouth advertising, which can bring in additional profits beyond the initial stream of revenue from that customer.

Customer Lifetime Value Is Equal to the Net Present Value