Life Time

September 19th, 2010 Leave a comment Go to comments

Life Time
How to measure customer life time value?

I am looking for information about how to build models or templates for clients / consumers with life-time value

An_man It is true that it is essentially the present value of future earnings. But how do you furutre result is important. This varries consumers, and the client. For example, if you are modeling an accounting firm that you would take the average earnings of different size times the average lifetime of commitment to customer, ie 5 years. This give you the projected cash flows of the next 5 years (the typical lifetime of a customer). To account for inflation adjsut futre is growing, and projections of earnings improved, if a company grows or the size of Complexity, or you can expect to increase their services outside of, i,. e. Taxes and audits.etc. if you are watching the consumer, ie the daily consumer goods, then the typical life is a little longer (this is determined by shifting the demographic target audience) Most people are now moving approximately every 5 years (these statistcis can confirm the U.S. Census Bureau). Then I could compare the patterns of purchase, tied to their income, combined with the net result of this input to enter the net value of said time schedule. Once you have identified these, then the net present value should be applied.


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