List - IList - IILife-time Value of CustomersLifetime Value of Customers is the net present value of future profits expected over the customer's lifetime purchases i.e. the firm is going to earn from each customer over his lifetime taken at an appropriate discount rate.In other words, projecting the expected profits from customers is a measure of lifetime value of customers.Formula: Customer Lifetime Value = Lifetime Value x Profit Margin.Cost and Revenues?Cost and revenue analysis refers to examining the cost of production and sales revenue of a production unit or firm under various conditions.The objective of a firm is to earn profit and not incur a loss.However, a firm's profit or loss is determined by its cost and revenue.Generic Strategy ReturnsGeneric strategies are generic in nature and are a way for a firm to pursue its competitive advantage across the market scope of choice.The advantage can be in the form of low cost or product differentiation.Considering these advantages and scope three generic strategies can be made: Cost leadership, Differentiation strategy, and Focus strategy.Marketing ProfitabilityMarket profitability analysis measures the net profit earned by undertaking business in a particular market.Trading in a market usually means trading with more than one customer.Wholesale and retail or public sector and private sector, are examples of different markets.Therefore, projecting the expected profits from customers is a measure of Life-time Value of Customers.Download Solution PDFShare on Whatsapp