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  • Dr. Alan Grossnickle

Increasing Customer Lifetime Value


“Customer lifetime value,” is a way of measuring how much your customers are worth over the time they buy your products and services. Increases in customer retention can increase sales and profits significantly. Research shows that it is six times more difficult to acquire a new customer rather than finding ways to retain a customer – Benefits may include:


  • A 5% increase in customer retention can create a 125% increase in profits.

  • A 10% increase in retention can translate to a 20% increase in sales.

  • Extending customer lifecycles by three years can triple profits per customer.


Support Customer Retention Activities – Once the typical lifetime value of customers is known, companies can decide how hard to work at retaining them. It is not a foregone conclusion that all customers are worth having. Activities should be tailored to the customers who are more valuable!


Business, The Ultimate Resource, pp. 706-707

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