## How to build profits through customers

A fundamental truth is that a business only exists when it has customers, and for most businesses, the majority of their profits come from ongoing transactions with customers.

Therefore, the goal of the marketer is to … Read more...

## Key Parts of the Customer Journey

Customers come to you from all different places and entry points. If you have a brick-and-mortar store, they might walk in the door on their own—or they might have been referred to your business by a friend. If they

## Age Cohorts and Gen Edge

When studying consumer behavior and/or the marketing environment, the concept of age cohorts is often discussed within the marketing textbook.

Age cohorts of very large groups of populations that were born in the same time – usually within the same … Read more...

## How to Use the Full CLV Calculator

You only need to enter four numbers – please only type over the numbers in the white cells – the numbers in the orange cells are automatically calculated for you.

To calculate the … Read more...

## What does a discount rate do?

Discount rate converts future cash flows (that is revenue/profits) into today’s money for the firm. For example, if you put \$100 into a bank account today that have 10% interest, then in 12 months’ … Read more...

## The Leaky Bucket Theory or Analogy?

The leaky bucket theory is more of an analogy than a theory. It is used because it is a nice and simple way of understanding the concept of customer relationship management and how to Read more...

## CLV and Customer Relationship Management (CRM)

The customer lifetime value equation essentially views a customer as an income stream. So instead of considering the customer’s purchases as single transactions, the marketing focus becomes creating ongoing series of profitable transactions. These … Read more...

## Main CLV Formula

Let’s look at the main CLV formula is two ways – the first way in words and then as a CLV equation (see separate article on another one of my websites). As you will see, the main customer lifetime value … Read more...

## Simple CLV Formula

There are two main approaches to calculating customer lifetime value.This article discusses the simple approach to calculating customer lifetime value – which is appropriate to use when customer profit contribution to each year are relatively flat. It is also a … Read more...

## Why calculate customer lifetime value?

Why has customer lifetime value – along with many other marketing metrics – becoming more important for marketers to use and understand? One of the key drivers is the shift from “art” to “science” in … Read more...

## What is Customer lifetime value?

Customer lifetime value is a measure of customer profitability over time. To help explain this concept, let’s start with a formal definition of customer lifetime value (CLV) from a well-regarded marketing metrics textbook. In the … Read more...

## Calculating customer lifetime value on a step-by-step basis

Customer lifetime value is often called marketing’s golden metric. Certainly in most service industries, customer lifetime value would be a very important marketing metric.

Customer lifetime value can be calculated quite simply at times, with a ballpark estimate. This may … Read more...