CHAPTER 8

Customer Lifetime Value Demystified

Chapter Overview

Today, customer lifetime value (CLTV) might no longer be a buzzword, yet it remains an important and valuable metric that helps marketers make informed business decisions.

Seemingly a straightforward and easy to understand concept, CLTV is indeed very intriguing and confusing in its definitions, calculations, and business applications.

This chapter aims to accomplish three goals: first, to clarify and eliminate common misunderstandings surrounding CLTV; second, to introduce a couple of simplified ways to calculate different CLTVs based on different business contexts; and finally, to illustrate how to apply different CLTVs to solve real-world problems.

This chapter is organized as ...

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