To calculate the lifetime value of a customer, a firm should utilize all of the following calculations except
A) the average amount of each purchase, multiplied by the average number of visits per year, and multiplied by the average life span of a customer
B) the cost of acquiring a customer
C) the value of new customers gained through the customer's referral or positive word-of-mouth communications
D) the average amount spent per purchase for all customers of the firm

Question

Quizplus · Accepted Answer

The lifetime value of a customer focuses on the revenue generated by a single customer over their lifetime, not the average amount spent per purchase for all customers.

To Calculate the Lifetime Value of a Customer, a Firm