The customer lifetime value (CLV) is equal to the net present value (npv) of the stream of profits over a customer's lifetime, _____.
A) minus the net expenses associated with satisfying that customer
B) plus the worth attributed to the equity a good customer can bring in the form of positive referrals
C) plus the opportunity costs saved from having loyal customers
D) minus the cost associated with identifying segments of consumers containing valuable customers

Question

Quizplus · Accepted Answer

CLV takes into account not only the profits gained from a customer but also the potential referral value. Option A and D are incorrect because CLV includes all expenses associated with retaining a customer, not just the expenses associated with satisfying the customer or identifying valuable customers. Option C is incorrect because CLV does not include opportunity costs saved from having loyal customers.

The Customer Lifetime Value (CLV) Is Equal to the Net