Comparison Between Customer Lifetime Value (CLV) and Traditional Measurement Tools of Customer Value

The ability to accurately predict the value of the customers of a company has huge impact on the capacity to make intelligent decisions. Knowing the individual value of each customer allows the identification of the most profitable customers and directing marketing spend towards them. This study analysis the benefits of a relative recent metric, customer lifetime value in opposition with more traditional metrics: RFM analysis, SOW, PCV, CPA. Towards these, customer lifetime value CLV is more efficient in selecting profitable customers.