Which Customers Are Worth Keeping and Which Ones Aren’t? Managerial Uses of CLV

Managers have long been interested in weeding out customers they consider to be less profitable than others. The question is, how do managers determine who belongs in that group? According to several Wharton marketing professors, there is no easy answer, despite new and increasingly sophisticated efforts to measure what is called “Customer Lifetime Value” (CLV) – the present value of the likely future income stream generated by an individual purchaser. CLV, it turns out, is hard to calculate and even harder to use.

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