Customer life time value can be maximized through gaining additional customers, retaining customers longer, and increasing their purchases.
Lifetime value modeling allows for identification of the best customers. This identification and segmentation technique enables companies to focus their efforts on customers that they need to keep and grow and also to discontinue pursuing possible relationships with those who have a negative lifetime value.
Models for decision support.
Through various modeling techniques and methods, it is possible to provide enough information to fully back strategic decisions. Making the right lifetime value decisions is a crucial move for any size company and is something that should not be overlooked.
Measure then manage.
The biggest mistake that companies make when it comes to lifetime value is that they fail to measure it in the first place. Without measuring customer lifetime value, it is impossible to manage and grow those relationships.