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.