Customer Lifetime

Posted in Marketing and Strategy Terms, Total Reads: 2393

Definition: Customer Lifetime

Customer lifetime is the approximate time for which the customer is expected to be associated with our firm/ brand. This is based various factors like customer satisfaction level, the competitive scenario, the economic environment in future etc. A firm can work on increasing the customer’s lifetime by concentrating on customer relationship management and by ensuring happy customers. A higher lifetime is one factor that can lead to a higher lifetime value of a customer.

Customer lifetime value is a widely used metric in marketing. This is calculated by following the following steps:

- The remaining life of customer is predicted

- The future revenues are forecasted based on the future products and their prices

- The net future profits are predicted

- Net present value of the profits is calculated

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