The key to solving this challenge came from calculating their Customer Lifetime Value (CLV).
Lifetime value is the net present value of the profit stream of a customer.
FORBES: The Dangerous Seduction of the Lifetime Value (LTV) Formula
The lifetime value of a customer is how much the customer spends over the long term (say a couple years).
Many consumer Internet business executives are loyalists of the Lifetime Value model, often referred to as the LTV model or formula.
FORBES: The Dangerous Seduction of the Lifetime Value (LTV) Formula
In addition, the lifetime value of a customer who uses Fab mobile apps is about 2 to 2.5 times that of a web user.
Then, using the average lifetime value as a baseline, you can tally up the differences in key areas for your group of loyal, enthusiastic customers.
The lowly ranked Customer Lifetime Value metric is often an overlooked but very valuable metric for aligning the performance of various groups across an organization.
So, instead of showing useless metrics like bounce rates, it focuses on metrics including revenue, the lifetime value of each customer, marketing attribution, and conversion rates.
The metrics that ranked lowest are far more interesting and valuable to strategic marketers: Cost per Customer Acquired (15%) and Lifetime Value of Customers Acquired (19%).
Andreessen: Fab, a company in New York, has a lifetime value of people who sign up with Facebook that is twice that of people who sign up elsewhere.
FORBES: Facebook Live: Charlie Rose Interviews COO Sheryl Sandberg, VC Marc Andreessen
Mr. MICHAEL GOODMAN (Analyst, The Yankee Group): There's a lifetime value of that PS2 customer, and you're making money off of them, you're making royalty payments off of them.
Retailers that get the most payback from loyalty programs are careful to measure vital metrics, like gross margin per customer and the lifetime value of a customer, which is tracked by using surveys and following forwarded emails to see who's recommending your store.
In The Dangerous Seduction Of LTV, venture capitalist Bill Gurley of Benchmark Capital pointed out ten pitfalls associated with one increasingly notorious metric: the lifetime customer value model (LTV).
And this is the horizon over which one needs to value lifetime benefits.
He added that, in terms of mortgages, "lifetime trackers still offer better value for the time being".
The value of the lifetime limit of lower rate capital gains will erode over time - will it be indexed in some way?
By measuring the performance ratio, power plant owners and operators can immediately and fully predict the performance of the plant over its lifetime, accurately assessing the value of the plant.
FORBES: Going Solar: A New Approach To Measuring Performance
To the contrary, in their useful lives they added exceptional shareholder value in earnings and lifetime contribution.
If a report by ESPN today is accurate than David Einhorn may be about to strike the deal of a lifetime that would reinforce what a savvy value investor he is and how desperate Fred Wilpon and Saul Katz have become in their search for cash.
Or maybe the value of the property has sunk so low that you doubt that it will come back to the value of the mortgage within your lifetime.
FORBES: Foreclosure, Deficiency Judgments and the Perils of Anti-Deficiency Statutes
How about a gift that can produce a monetary value for your loved one for a lifetime?
This first wearable and updateable platform is the only one that enables enterprises to get more value out of the device over its lifetime through functional updates as Cisco enhances its UC offering.
ENGADGET: Jawbone Icon for Cisco is the for-business Bluetooth headset compatible with VoIP phones
So far Apple has almost lost a whole Google in value and in the last few weeks has lost a lot more than Warren Buffett has taken his whole lifetime to build up.
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