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Marketing Analytics: Measuring and Assessing Customer Lifetime Value (CLV) You are the owner of a smoothie shop in California. After hearing a podcast about customer

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Marketing Analytics: Measuring and Assessing Customer Lifetime Value (CLV) You are the owner of a smoothie shop in California. After hearing a podcast about customer relationship (CRM). you decide to gather more information regarding customer behavior in your store to better understand relationships that exist between your bus iness and your customers. CRM is a comprehensive business model for increasing revenues and profits by focusing on customers crucial metrics associated with a CRM system. Collecting data on customers and their relationships with a company ( commonly storing it within a CRM system) helps make it possibl spend throughout their relationship with a company. (CLV) is particularly important when it comes to CRM and is often considered one of the most e to calculate CLV, or the total amount a customer wil After a review and analysis of your customer data you are able to determine the following information: Average Value of Sales per Year per Customer. $120 Average Customer Retention Cost: $75 Customer Acquisition-oriented Marketing Expenses per Month:$1,000 Average Customer Retention Rate: 80% You acquire an average of 25 new customers a month. Us e the following equations to help determine the CLV: Customer Acquisition Cost - Customer Acquisition -oniented Marketing Expenses per Monthi Number of New Customers Acquired per Month Customer Lifetime Value [v1-Average Customer Retention Rate)]l x (Average Value of Sales per Year per Customer Average customer Acquisition Cost+ Average Customer Retention Cost) This activity is important because marketing managers need to understand and know how to calculate customer lifetime a part of customer relationship management. Knowledge of CLV can inform a number of critical marketing factors as the development of strategies designed to aid in the acquisition, nurturing, and decisions related to such retention of customers The goal of this exercise is to test your understanding of CLV by considering this example

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