| Original language | English |
|---|---|
| Title of host publication | Wiley encyclopedia of management |
| Subtitle of host publication | Vol. 9 : marketing |
| Editors | Cary L Cooper |
| Place of Publication | Chichester, UK |
| Publisher | John Wiley & Sons |
| Volume | 9 |
| ISBN (Print) | 9781118785317 |
| DOIs | |
| Publication status | Published - 2014 |
Abstract
A customer's lifetime value (CLV) is an estimate of the present value of the future cash flows associated with a particular customer or group of customers. CLV is a forward-looking concept that takes a long term perspective on a supplier's relationship with a customer and is the same unit of measurement that creates customer equity. The aggregated CLV of a firm's entire customer base equals the firm's customer equity. To compute the CLV of a specific customer, a firm needs to estimate net profits generated by the customer, expected purchasing life, and acquisition costs.
Keywords
- customer lifetime value
- net profits
- customer equity
- churn rate
- discount rate