NPV methods can be used to estimate the present value of a customer to a business so that strategic decisions can be made to retain customers and lower churn rates.

Question

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NPV (Net Present Value) methods can be used to calculate the present value of future cash flows from a customer, which can be useful in making strategic decisions to retain customers and reduce churn rates. By estimating the lifetime value of a customer, a business can determine the appropriate level of investment in customer retention and loyalty programs.

NPV Methods Can Be Used to Estimate the Present Value