The Risk of Using 'Customer Lifetime Value (CLV)' in Managing Marketing

Customer Lifetime Value (CLV) is a great metric used to identify the most valuable clients for a company. When implementing this metric, the company has to take into account several issues: a) business to business or business to customer sector, b) number of customers in the database, c) type of relations held with the customers. Also, the company has to be aware that a part of the clients may be misplaced, either in the valuable segment, or in the segment with lower profitability. Customer lifetime value (CLV) is measured as a discounted measure for future income but different models may be used