Basic Terminology: What is Customer Lifetime Value?

Customer Lifetime Value, also referred to as the lifetime value is the net present value of cash flow. This value tends to be greater when focusing on customer service and long-term customer satisfaction, rather than on maximizing short term sales.

Marketers use this value because it signifies a real value on how much a marketing department. Calculations of these values are complex. Specific calculations depends on the nature of the customer relationships.

For more information on how to compute a customer lifetime value, you can go here.