For managers and marketers alike, the power to calculate what customers might be worth is alluring.
That’s what makes customer lifetime value (CLV) so popular in so many industries. CLV brings both quantitative rigor and long-term perspective to customer acquisition and relationships. “Rather than thinking about how you can acquire a lot of customers and how cheaply you can do so,” one marketing guide observes , “CLV helps you think about how to optimize your acquisition spending for maximum value rather than minimum cost.”
By imposing economic discipline , ruthlessly prioritizing segmentation, retention, and monetization, the metric assures future customer profitability is top of mind.
My point of view: In this age of digital marketing, disruption and new business models and platforms understanding how to drive customer life time value is central to the success of any organization. Imperative for any marketing manager and, for that matter, any manager concerned with growing the value of the customer base.