Customer Lifetime Value
Nothing is more important to your bottom line than getting new customers, but you need to know what a customer is worth to determine how much you are willing to spend to acquire one. By calculating Lifetime Customer Value (LCV), you can determine the potential dollar value a customer will contribute to your business and capitalize on the full potential of your current and prospective customer base.
Why Lifetime Customer Value Matters to your Business
Most industry experts agree that it costs five times more to acquire a new customer than to retain an existing one. So, when thinking about how much a potential customer is worth to you, it’s important to look beyond the initial transaction and estimate the total value that customer can potentially bring to your business over time. With this information, you can better decide which forms of marketing you want to execute to acquire new customers