Customer Lifetime Value lets you determine what a customer is worth to your small business over time. 

 

For example, a repair shop that repairs broken phones lets thier customers pay a $20.00 per month subscription fee in order to get their phones fixed at any time it is broken.  The average retention time for a customer is 2 years.  So, the value of that customer would be:

 
$20.00 (monthly subscription) x 12 (months) X 2 (years)  = $480.00
 

The key is to maximize the Customer Lifetime Value.  To do so you must get the customer to make more repeat purchases and keep them coming back for a longer period of time.  You can also try to get them to increase the value of their purchases. 

Doing these things will enable to achieve greater customer lifetime value.

 

- Build Brand Loyalty:

 

- Focus on Customer Retention:

 

- Offer Incentives and Rewards: