Question

Which metric is based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquiring and servicing that customer, and the expected life of the relationship between the customer and the company?1. Churn rate2. CLTV3. Cost per lead4. Cost per sale

Answer 1

2) CLTV

Step-by-step explanation:

Customer lifetime value (CLTV) is simply how much profit do you expect to earn from a specific customer, or group of customers. There are several ways of calculating CLTV, but I believe this is the easiest one.

CLV = T x AOV x AGM x ALT

• T = average transactions per month
• AOV = average order value
• AGM = average gross margin
• ALT = average life span