What is the lifetime value of customers, and how can marketers maximize it ?

What Is The Lifetime Value Of Customers,

And How Can Marketers Maximize It ?

Marketing is the art of attracting and keeping profitable customers

A Company could improve its profits by ‘firing’ its

worst customers

A Profitable Customer is a person, household or company that over time yields a revenue stream exceeding by an

acceptable amount the company’s cost stream for attracting, selling and serving that customer

The emphasis is on the lifetime stream of revenue and cost

The emphasis is on the lifetime stream of revenue and cost

We are not talking about a particular transaction

Lifetime Revenue Stream > Lifetime Cost Stream

Lifetime Revenue Stream > Lifetime Cost Stream

That makes for a profitable customer !

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P1

P2

P3

P4

Highly Profitable Product

Profitable Product

Unprofitable Product

Highly Unprofitable Product

C1 C2 C3

High Profit Customer

Mixed Bag Customer

Losing Customer

Customer Profitability Analysis

Estimate Customer Lifetime Value

Realize Your ProfitsLike No One Else

Slides by : Priyanjit Biswas

Created by :

PRIYANJIT BISWAS,JADAVPUR UNIVERSITY

During an Internship by :

Prof. SAMEER MATHUR,IIM LUCKNOW

www.IIMInternship.com