What is the lifetime value of customers?

You’ve no doubt heard again and again that your customers are valuable to your business. But do you know just how valuable they are? Can you define how profitable each customer, or each customer segment, is? And is it really important to do such an analysis?

Whilst the revenue generated from a single sale is important, “Value” cannot be measured simply by the revenue a customer generates for your company. It must also include an evaluation of the costs of acquiring, supporting and selling to that customer, as well as the potential a single customer / segment represents. It takes some effort, but once you understand these factors you’ll be well on your way to determining the life-time value of customer relationships. In turn this helps form better sales … read more by subscribing.