Final answer:
The higher the rate of customer retention, the longer the average customer life expectancy and the greater the customer lifetime value.
Step-by-step explanation:
The statement is true. The rate of customer retention refers to the percentage of customers that a business is able to keep over a certain period of time. When the rate of customer retention is higher, it indicates that a larger proportion of customers are staying with the business for a longer time period.
This leads to a longer average customer life expectancy, which is the amount of time a customer is expected to remain a customer of the business.
In turn, the longer the average customer life expectancy, the greater the customer lifetime value. Customer lifetime value is a measure of the total amount of revenue a business can expect to generate from a single customer over their entire relationship with the business.
When customers stay with the business for a longer time period, they have more opportunities to make repeat purchases, leading to a higher customer lifetime value.
The statement is true.