From Subjectivity to Objectivity - Measuring Customer Lifetime Value Constructs

Abstract

As data drives decision making in business more and more, it becomes essential to objectify key market metrics such as
Customer Lifetime Value (CLV). CLV is the value added by a customer to a firm’s profits during its association with the firm’s products
or services. Therefore, it becomes important for firms to employ suitable strategies to prolong a customer’s lifetime. In this paper
we have taken this subjective aspect of CLV and given it a measurement. We have used this measurement to establish a
connection between customer satisfaction and maximization of ROI. Next, we have again used this measurement to compare three
different marketing strategies in a market driven firm.