What is the lifetime value of customer, and how can marketers maximize it ,
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This document discusses the lifetime value of customers and how marketers can maximize it. It notes that according to the 80-20 rule, 80% of company profits typically come from 20% of customers. It defines a profitable customer as someone who generates more revenue than costs over time. It also discusses calculating customer lifetime value, which is the net present value of expected future profits from a customer over their lifetime with the company. Key factors in the calculation include price paid, direct servicing costs, discount rate, probability of repeat purchases, and acquisition costs.
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What is the lifetime value of customer, and how can marketers maximize it ,
- 1. WHAT IS THE LIFETIME VALUE OF CUSTOMERS, AND HOW CAN MARKETERS MAXIMISE IT ?
- 2. 80–20 RULE 80% OR MORE OF THE COMPANY PROFITS COME FROM THE TOP 20 % OF ITS CUSTOMER.
- 3. 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.
- 5. CUSTOMER LIFETIME VALUE DESCRIBES THE NET PRESENT VALUE OF THE OF FUTURE PROFIT EXPECTED OVER THE CUSTOMER’S LIFETIME PURCHASE.
- 6. CALCULATING CUSTOMER LIFETIME VALUE pt = price paid by a consumer at time t ct = direct cost of servicing the customer at time t i = discount rate or cost capital for the firm rt = probability of customer repeat buying or being “alive” at time t AC = acquisition cost T = time horizon for estimating CLV
- 7. 80-20 rule Customer profitability Customer profitability analysis Measuring customer lifetime value
- 8. CREDIT Philips kotler Marketing Management : a south Asian perspective Google Image Search Prof. Sameer Mathur IIM-L Marketing Management : DR. Ajeet Kumar Shukla Slideshare.net
- 9. PRESENTATION BY B. COM, MAHATMA GANDHI KASHI VIDYAPITH VARANASI INTERN IIM-L (MARKETING MANAGEMENT) MENTOR: PROF. SAMEER MATHUR kumarajeet50@gmail.com
- 10. THANK YOU