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Tag: clv

Outcomes of customer satisfaction

The two dimensions of customer satisfaction

The customer’s assessment of their satisfaction following a purchase and consumption of a product involves a comparison of two views:

  1. What were their EXPECTATIONS of value prior to purchase?
  2. What was their perception of
… Read more...
Author Geoff FrippPosted on Categories Customer Satisfaction, Introductory ConceptsTags clv, customer satisfaction

Quick Online CLV Calculator

Free online CLV calculator

The following free online CLV calculator is ideal for quick calculations of customer lifetime value. If you need a more detailed calculation of customer lifetime value, please download the free Excel template for calculating customer lifetime … Read more...

Author Geoff FrippPosted on Categories Customer Lifetime Value, MetricsTags analysis, clv, customers

Full CLV Calculator (with Financials)

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...

Author Geoff FrippPosted on Categories Customer Lifetime Value, MetricsTags analysis, clv

Videos on CLV

There are five CLV videos available here:

  1. Using the free Excel CLV template (available for download on this site)
  2. A step-by-step guide to the CLV formula and calculation
  3. Using Excel to calculate CLV (without the above template)
  4. A guide to
… Read more...
Author Geoff FrippPosted on Categories Customer Lifetime Value, Customer Relationship Management, Metrics, Videos - CRMTags analysis, clv, customers

The Role of the Discount Rate in CLV

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...

Author Geoff FrippPosted on Categories Customer Lifetime Value, MetricsTags clv, financials

Financial Metrics for CLV

Understanding the financial metrics for customer lifetime value

The full customer lifetime value calculator and the free Excel CLV template both provide a summary outcome for several related financial metrics. Please refer to the image below of the full CLV … Read more...

Author Geoff FrippPosted on Categories Customer Lifetime Value, MetricsTags clv, customers, profit

The Leaky Bucket Theory

The Leaky Bucket Theory or Analogy?

diagram of the leaky bucket theory
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...

Author Geoff FrippPosted on Categories Customer Relationship ManagementTags clv, crm, models

Relationship between CRM and CLV

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...

Author Geoff FrippPosted on Categories Customer Lifetime Value, Customer Relationship ManagementTags clv, crm, customers

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...

Author Geoff FrippPosted on Categories Customer Lifetime Value, Customer Relationship Management, MetricsTags analysis, clv, profit

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...

Author Geoff FrippPosted on Categories Customer Lifetime Value, Customer Relationship ManagementTags clv, profit

The Benefits of Customer Lifetime Value

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...

Author Geoff FrippPosted on Categories Customer Lifetime Value, Customer Relationship ManagementTags clv, profit

Definition of customer lifetime value

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...

Author Geoff FrippPosted on Categories Customer Relationship ManagementTags clv, profit

The average lifetime of a customer

 

Customer lifetime value has three main components:

  • The acquisition cost of customer
  • The annual profit of customer
  • And the lifetime of the customer to the firm

The average lifetime of a customer

The final component in the customer … Read more...

Author Geoff FrippPosted on Categories Customer Relationship Management, MetricsTags clv

The annual profit of a customer in CLV

 

Customer lifetime value has three main components:

  • The acquisition cost of customer
  • The annual profit of customer
  • And the lifetime of the customer to the firm

The annual profit of a customer

The main component of the customer lifetime … Read more...

Author Geoff FrippPosted on Categories Customer Relationship Management, MetricsTags clv, services marketing

Customer Acquisition Costs

 

The calculation for customer lifetime value has three main components:

  • The acquisition cost of customer
  • The annual profit of customer
  • And the lifetime of the customer to the firm

Customer acquisition costs

This is the amount of money it … Read more...

Author Geoff FrippPosted on Categories Customer Relationship Management, MetricsTags clv

Why customer revenue will increase over time

 

When considering the goal of trying to increase a customer’s lifetime value, one of the main levers is to attempt to increase loyalty/retention which will increase the length of time a customer remains a customer.

In the customer lifetime … Read more...

Author Geoff FrippPosted on Categories Customer Relationship ManagementTags clv

How to calculate a customer’s lifetime in years

 

A key aspect in the customer lifetime value (CLV) calculation is time spent as a customer – commonly referred to as the customer’s lifetime. When we refer to the customer’s lifetime in a marketing context, we are considering the … Read more...

Author Geoff FrippPosted on Categories Customer Relationship Management, MetricsTags clv

Using the free Customer Lifetime Value (CLV) template – VIDEO

 

This website has a free Excel spreadsheet template that can enable to quickly calculate customer lifetime value for your university assignment or for your firm. Go here to download the customer lifetime value template.

There are also step … Read more...

Author Geoff FrippPosted on Categories Customer Relationship Management, Metrics, Videos, Videos - CRMTags clv, video

Understanding customer lifetime value (CLV)

 

Customer lifetime value or CLV is a key marketing metric that is primarily used in relationship marketing oriented organizations. In simple terms, it is the profit attributable to an individual customer during their time as a customer with the … Read more...

Author Geoff FrippPosted on Categories Customer Relationship Management, MetricsTags clv, Excel

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Welcome to the Marketing Study Guide

This free study guide has been prepared to meet the information needs of university-level marketing students throughout the world. This study guide is a comprehensive discussion (along with many examples) of the key aspects of marketing as covered across various textbooks and study programs

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