Customer Lifetime Value Is a Thesis

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Based on lifetime value, the firm can try to increase it from 3 to 5 purchases a year and still retain its customers. This can be done by offering new products and also attracting new customers to the shop with greater lifetime value.

Offering new products:

By offering new products and better deals, the company can increase frequency of purchase from its existing customer base. If an average regular customer increases his purchases by even one single purchase, this would give them this firm an additional $9,000 more from each customer. Translated into the monetary benefits over a lifetime of each and every customer, this single increase might prove beneficial for the firm. Attracting younger customers:

This is often a strategy used by many corporations.

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When they feel that they need to increase customer lifetime value, instead of offering newer products alone, they also try to attract the younger crowd because of their longer life span. If MJ's average customer is around 40 years old, this leaves them with 30 or 35 years of active purchase. But if younger customers are attracted, this can easily add another 10 to the years of purchase and hence the additional gain would $11,000 per customer. This is an easy way of increasing lifetime value and revenues of the firm.

Hence MJ should opt for a mixture of both strategies. It can retain the existing customers, attract new ones….....

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