Customer lifetime value represents:
A) the portion of income spent on leisure by a customer over the course of his lifetime.
B) the increase in the purchase of current goods and services that results from an increase in income.
C) a customer's assessment of the value of the brand, above its objective value.
D) the present value of the likely future income stream generated by an individual purchaser.
E) the tendency of a customer to stick with a brand even when it is priced higher than an otherwise equal product.

Question

Quizplus · Accepted Answer

Customer lifetime value refers to the present value of the estimated future revenue generated by a customer over the course of their relationship with a company. This includes not only the initial purchase but also any subsequent purchases and their likelihood of continuing to be a customer. Therefore, option D is the correct answer. Option A is incorrect as it refers to leisure spending, not the value a customer brings to a company. Option B is incorrect as it refers to an increase in income, not the value generated by a customer. Option C is incorrect as customer lifetime value is about objective value, not subjective assessments of value. Option E is incorrect as it refers to customer loyalty, which may contribute to customer lifetime value but is not the definition of it.

Customer Lifetime Value Represents