Question

1. Customer Lifetime Value is useful to marketers because:

   	a.	It allows the marketer to build an accurate picture of customers spending patterns and the value of building loyalty.
   	b.	It allows marketers to correlate the stage of product lifecycle with the value that can be created at a particular point in the customers life.
   	c.	It is not a useful tool for marketers as customers have more choice than ever before meaning that they are no longer loyal to any one product.
   	d.	It allows the marketer to gain more sales because of what a customer spends over their lifetime.
   	e.	It allows the marketer to calculate the value of life style marketing rather than product marketing

Answer 1

PLEASE RATE POSITIVE IF YOU LIKE MY ANSWER TO PROTECT MY EMPLOYMENT

Customer lifetime value is the worth of a customer relationship to a business over a period of time.By knowing the worth, businesses can take decision about how much to invest on the relationship so that it is a net gain.

Hence Option (a) is the correct answer. It is worth investing in loyalty of a high value customer and not in a low lifetime value customer

Rest of the options are incorrect

Life time value is about value over a period of time and not about creating value at a particular stage

It is a useful tool for marketers to improve ROI

It doesn't help in getting more sales, it helps in investing marketing efforts for higher % returns

Option (e) is irrelevant