What's a Customer Really Worth to You?By Ryan Condon, David Semb, and Jeff Lefebvre
Article Date: 09-01-2012
Copyright(C) 2012 Associated Equipment Distributors. All Rights Reserved.
Calculate their lifetime value to your business, and you’ll work harder to never let them go.
A study conducted several years ago found that the lifetime value of a Taco Bell customer amounts to approximately $11,000. For Taco Bell, the profit from a single $5 exchange for a taco, soda, and cinnamon crisps is less important than the long-term benefits of fostering enduring customer relationships. Many companies fall into the trap of thinking of customers as purely short-term individual transactions, but a closer look at customer lifetime value, or LTV, reveals that spending the time and effort to develop long-lasting customer relationships often yields greater profits over the long term.
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