customer lifetime value (CLV) and customer equity

Marketing
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What are the similarities and differences between two measurement of customer lifetime value (CLV) and customer equity?

Oct 7th, 2015

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 Customer  lifetime  value  by definition is simply the prediction of net profits attributed for the  period of relationship that the customer has had with the firm while  Customer equity is  the accumulation of all customer lifetime value  equal to the firms equity.

 Similarities

  Both are financially based approaches  and used to evaluate the contribution of customers to forms equity and growth in terms of value

 They mutually relate , CLV makes up the customers equity, They are important in finding the most  optimal values in investments and sales


 CLV focuses on long term benefits  to the customer  out of the firm. its purpose is to assess the  finacial value of each and every customer in the firm.

 Continuing ............... be patient please


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Oct 7th, 2015

 Both enables the firm to improve customer service and also quality of products due to loyalty assessed.

Both enables the firms management to  focus on long term value of their customers and also  help in analyzing the better way of customer retention

 Difference

Customer equity takes into consideration factors like  brand equity, value and retention equity while CLV takes into consideration the behavior of the customers

CLV is more concerned about the  calculation of a customer equity while Customer equity is basically the total value attributed of being loyal and  a customer in a particular business


Oct 7th, 2015

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