Question

The expected financial contribution that a customer will give to a company over the course of their life is called _______. a) Customer Lifetime Value (CLV)

b) Return on Investment (ROI)
c) Market Share
d) Customer Equity

Answer 1

Customer Lifetime Value (CLV) represents the total revenue a company anticipates earning from a customer throughout their entire business relationship. It is used to guide customer acquisition and retention strategies with regard to maintaining profitability. The correct option is a) Customer Lifetime Value (CLV)

Step-by-step explanation:

The expected financial contribution that a customer will give to a company over the course of their life is called Customer Lifetime Value (CLV).

This metric estimates the total revenue a business can reasonably expect from a single customer account throughout the business relationship. It factors in a customer's revenue potential and includes considerations of the customer's delivery and service costs.

CLV is a vital statistic because it helps companies develop strategies to acquire new customers and retain existing ones while maintaining profit margins. The correct option is a) Customer Lifetime Value (CLV)