Question

What does CLV predict?

1) The effectiveness of marketing efforts
2) The value of specific customer segments
3) The profit associated with a customer during their lifetime relationship with a company
4) All of the above

Answer 1

Customer Lifetime Value (CLV) predicts the profit associated with a customer during their lifetime relationship with a company.

Step-by-step explanation:

Customer Lifetime Value (CLV) predicts the profit associated with a customer during their lifetime relationship with a company. It is a metric used in marketing analysis to estimate the total value that a customer will generate for a company over the entire duration of their relationship.

CLV takes into consideration not only the revenue generated by a customer but also the costs associated with acquiring and retaining that customer. It helps businesses identify and prioritize their most valuable customers and allocate marketing resources more effectively.

So, the correct answer to your question is: 3) The profit associated with a customer during their lifetime relationship with a company.