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Marketing - Customer Lifetime Value


On the Use of Customer Lifetime Value As a Limit on Acquisition Spending The lifetime value of a customer, defined to be the expected present value of the net cash flows from the firmís relationship with the customer over his or her lifetime, is often used as an upper limit on spending to acquire the customer. The purpose of this paper is to examine carefully this use of customer lifetime value. This paper will offer several examples where acquiring a customer can affect (either positively or negatively) the firmís relationship with its other customers and/or prospects. In other words, sometimes the acquisition of a customer affects the lifetime values of the firmís other customers and prospects. In those situations, the firm must account for these higher order effects when setting a limit on acquisition spending. pdf-file 1999






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Status: 05. Januar 2010