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Which woman has the most valuable CLV?
Shirley: purchased $400 in December and spent nothing else the rest of the year for a total of $400.
Marcia: spent between $10 and $65 each month from December to November for a total of $355.

Respuesta :

Answer:

Marcia

Explanation:

Marcia has the most valuable CLV (Customer life time value) as she continuously spents her money on the business.

Using the formula

CLV = Average value of customer purchase X Number of times the customer will buy each Year X Average length of the customer relationship (in years).

Marcia's CLV= $10 X 1 X 1 =$10

Shirley's CLV= $400 X 0 X 1=$1

Remember, the Customer life time value is a measure of a customer's worth to a business in terms of how much money they will spend on products during their life time.

jepessoa

Answer:

Marcia should have the highest CLV

Explanation:

there are several formulas for calculating customer lifetime value (CLV) but since the amount of information is limited, then I'll use the easiest one (for me at least).

CLV = T x AOV x AGM x ALT

  • T = average transactions per month
  • AOV = average order value
  • AGM = average gross margin (we are not given enough information)
  • ALT = average life span

                                            Marcia                              Shirley

T                                        12 per year                        1 per year

AOV                        $355 / 12 = $29.58                      $400

AGM                                       N/A                                  N/A

ALT                        since she is a regular client,            1

                       at least 2 years (this one and next)

Marcia's CLV = 12 x $29.58 x 2 = $709.92

Shirley's CLV = 1 x $400 x 1 = $400

Given the limited information, we can assume that Marcia is a much more valuable client than Shirley.

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