BNET Business Dictionary
Business Definition for: Customer Lifetime Value
- the net present value of the profit an organization expects to realize from a customer for the duration of their relationship. Customer lifetime value focuses on customers as assets rather than sources of revenue. The volume of purchases made, customer retention rates, and profit margins are factors taken into account in calculating customer lifetime value. Strategies for increasing customer lifetime value aim to improve customer retention and lengthen the life of the relationship with the customer. Customer lifetime value is a key factor in the customer equity of an organization.
Additional Resources
- Measuring and Growing Customer Lifetime Value
- Customer lifetime value CLV is a way of measuring how much your customers are worth to your business over the time they buy your products and services. A well-run CLV program can help you identify which customers are worth your greatest attention – and can help you make the most...
- Articles 2007-02-28
- Fixing the Customer Lifetime Value Equation
- You've likely heard of the Customer Lifetime Value calculation, or CLV. Run your actual and projected costs in attracting and keeping a customer over a fixed time period and compare those expenses to the sales said customer is expected to produce. The result is a number called Net Present Value....
- Blog posts 2007-12-17
- Increasing Customer Lifetime Value
- "Customer lifetime value" is a way of measuring how much your customers are worth over the time they buy your products and services. This document explains how to categorize and analyze customers according to four key attributes, which in turn enables more focused marketing activities to improve customer lifetime...
- Download resources 2006-06-05
- Increasing Customer Lifetime Value
- Increasing Customer Lifetime ValueGood article but...The article points out, accurately, that CLV is a key strategic marketing metric. However, it makes the mistake of using a formula that groups all customers together. These include profitable and unprofitable customers. If you can't separate profitable from unprofitable customers, how can you...
- Discussion threads 2007-03-13
- Increasing Customer Lifetime Value
- "Customer lifetime value" CLV or LTV is a way of measuring how much your customers are worth over the time they buy your products and services.
- Articles 2007-02-01
- Convergys Introduces New Solution to Maximize Customer Lifetime Value for its Clients
- CINCINNATI -- Convergys Corporation (NYSE:CVG), a global leader in customer care, human resources, and billing services, announced today the availability of its Lifetime Value Optimizer solution that helps businesses maximize the lifetime value of each of their customers. The Convergys solution has been undergoing pilot testing over recent months with...
- Research articles 2007-04-30
- Value in Marketing: Confusion or Illumination?
- Marketing researchers have attached the term value to a number of concepts. It is unclear if, in all cases, there is an underlying and unifying meta-concept of value, or If the word value is being stretched to cover disparate concepts. On the other hand, it is quite clear that, in...
- White papers 2004-11-15
- The Real Value Of Customer Loyalty
- From the executive summary: ‘It is a marketing truism that higher buying rates and lower service costs make long-term customers more valuable. That, of course, influences what companies spend on customer acquisition and retention. According to studies, customer-lifetime-value metrics can and should inform many business decisions in the marketing realm...
- White papers 2003-01-01
- Managing Customers For Value
- The energy retail business thrives on efficient customer interactions. Customers are the lifelines of the energy retail business. They want efficient service, better products, and good offers from energy retailers. In such scenario, it becomes imperative for the energy retailer to keep a track of the Customer Lifetime Value CLV...
- White papers 2004-03-11
- Maintaining the Customer Experience
- Stinting on customer service is a common and sometimes costly response to tough economic times. By managing the customer experience more rigorously, companies can maintain quality while still saving money. The challenging economy is putting consumer companies such as airlines, banks, and retailers in the...
- Articles 2009-01-12
- Challenges of a Customer-Centric Business Strategy
- Companies are beginning to understand that retaining customers over the long term is key to profitability. While much has been written on the values of such customer-centric or relationship marketing efforts, less attention has been given to its implementation - especially the key role that the information technology IT organization...
- White papers 2002-03-01
- Midcontinent Communications Signs Contract to Use the Convergys Lifetime Value Optimization Solution
- CINCINNATI & SIOUX FALLS, S.D. -- Convergys Corporation (NYSE:CVG), a global leader in providing customer care, human resources, and billing services, announced today that Midcontinent Communications has signed a three-year license agreement to use the Convergys Lifetime Value Optimization Solution.
- Research articles 2007-08-02
- Sales Training To Maintain Customer Loyalty
- Sales courses and sales training courses can give your sales team and your non-sales staff the education and skill set needed to keep your customers away from your competitors. An investment in sales training is an investment that results in long-term savings and increased profits. Sales courses and sales training...
- White papers 2009-05-21
- Measuring Marketing Performance
- Marketing is a necessary investment for generating and maintaining profit, rather than just an expense. Finding, getting, and retaining business costs money. As a result, marketing executives need to know the return on investment ROI of their marketing expenditure. However, measuring marketing activities can be problematic. To take a simple...
- Articles 2007-11-26
- How Valuable Is Word of Mouth?
- The Idea in Brief Your most valuable customers are those who buy the most, right? Not necessarily. According to Kumar, Petersen, and Leone, your most valuable customers are those whose word of mouth brings in the most...
- Articles 2007-11-07
- What Are Your Customers Worth?
- Most senior executives say their companies should be customer-focused. Yet in times like these, when budgets are tight, some of the first expenditures to be cut are for marketing and IT, both of which are supposed to help companies better understand and serve customers. The lifetime value of a customer...
- White papers 2002-05-01
- The Right Way to Manage Unprofitable Customers
- Some of your customers aren't paying their bills. Others are so high-maintenance that the cost of serving them is eroding your profits. What to do? For many companies, the answer is simple: Show them the door....
- Articles 2008-07-01
- How to Identify Your Most Profitable Customers
- It is very essential to identify the customers in the market in order to target them and maximize the output. Understanding customer value not only helps companies better allocate resources for retention activities, it allows companies to understand what constitutes a valuable customer. Thus, this article deals with the obstacles...
- White papers 2003-01-01
- Building a 360-degree View of the Customer
- Customers typically interact with many different departments or contacts in a company. To build the most effective and profitable relationship with a customer, it's essential for everyone in a company to have access to the full 360-degree view of customer transactions. Putting all customer details, purchases, contacts, inquiries, and service...
- Articles 2007-10-30
- That Elusive Customer Loyalty: How to Build It, Learn From It and Profit From It
- Relationship marketing is grounded in the idea of establishing a learning relationship with customers. At the lower end, building a relationship can create cross-selling opportunities that may make the overall relationship profitable. With valuable customers, customer relationship management may make them more loyal and willing to invest additional funds. In...
- White papers 2000-11-22
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