Final answer:
The correct term for the combined monetary value of customer referrals and associated costs is Customer Lifetime Value (CLV), as it includes all the projected profits a business can expect over the length of its relationship with a customer.
Step-by-step explanation:
The monetary value of the referrals from satisfied customers and the cost to get and maintain the referrals is known as Customer Lifetime Value (CLV). This concept encapsulates the total worth of a customer to a company over the length of their relationship, factoring in not just the direct revenue from purchases but also the additional revenue generated through referrals. It contrasts primarily with Customer Acquisition Cost (CAC), which focuses only on the initial cost to gain a new customer.
Understanding CLV is crucial for businesses aiming to build long-term profitability through loyal customer bases and efficient marketing strategies. An effective referral program, endorsed by current customers, can significantly enhance a company's CLV by reducing the need for costly marketing campaigns to acquire new customers. Calculating CLV involves estimating the revenues attributed to a customer over time, subtracting the costs associated with acquiring and keeping that customer, including investments in referral programs.