A company sells a subscription service for mowing lawns.Customers typically remain subscribed for 3 years, and they pay $20.00 per month for the service, which means $240.00 ($20.00 *12 months)per year or $720.00 ($240.00 *3 years)potential revenue from the customer.In this case, the $720.00 of potential revenue is the:
A)differentiated segmentation value.
B)undifferentiated segmentation value.
C)perceptual mapping value.
D)ideal point value.
E)customer lifetime value.

Question

Quizplus · Accepted Answer

The $720.00 of potential revenue is referred to as the customer lifetime value, which represents the total amount of revenue a business expects to earn from a customer throughout their entire relationship. Therefore, the best choice is E (customer lifetime value).

A Company Sells a Subscription Service for Mowing Lawns