RetailWire BrainTrust Query for this week is: Is customer lifetime value a waste of time?

Should retailers measure performance based on customer lifetime value (CLV)? CLV can be useful in certain situations, but I have found that in many organizations CLV becomes so complex that it is rarely successful.

CLV is a marketing measurement that combines (1) anticipated length of relationship with (2) anticipated customer financial value (discounted to reflect the net present value of future cash flows) to create a predicted measure of how profitable a customer will be.

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