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Key Business Analytics by Bernard Marr

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44

Customer lifetime value analytics

What is it?

Customer lifetime value analytics is the process of analysing how valuable the customer is to the business over the entire lifetime of the relationship. Instead of looking at transaction profitability this tool seeks to establish how long a customer is likely to stay a customer, how often they are likely to buy during that period and therefore how valuable they are across that time frame.

For some companies a customer may be profitable as soon as they make their first purchase. For others they may only become profitable after several purchases. Clearly it’s important to know which camp your customers fall into.

Why does it matter?

Customer lifetime value analytics matters because it allows you ...

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