What Is The Meaning Of Customer Profitability And Lifetime Value?
It is widely cited so called “80/20 rule” which states that the relatively small percentage of all consumer accounts for the disproportionately large portion of the company’s sales and profits. With the increased focus on building and maintain long-term relationships with consumers, many companies are now developing systems that will identify highly profitable customers as quickly as possible and target these customers with special offers to buy even more of the company’s products and services. Such systems stem from the collection and analysis of internal secondary data such as past customer transactions, letter from customers, sales calls report, warranty cards and data on the frequency and duration of customers interactions. On these data savvy marketers computer customers lifetime value profiles for various customer segments. The customer lifetime value can be computer from customer acquisition. The profit generated from individual sales to each customer the profits generated from
