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It looks to me that those calculations are only correct if you ignore future customers. Only your current customers are used for the calculation. CLV assumes
by wccrawford 15y ago
It looks to me that those calculations are only correct if you ignore future customers. Only your current customers are used for the calculation.
CLV assumes that everything continues as it is today, including gain and loss rates of customers. If you stop gaining new customers, then yes, it's going to be WAY out.
- alex_c 15y agoFuture customers obviously affect revenue, but how do they affect CLV?
- jaredmck 15y agoFuture customers would be acquired via different channels than current customers, and therefore they'd have a different CLV (depending on the channel mix).
- aaronjg 15y agoCustomer Lifetime Value is a measure of the value per customer. So if acquisition rates are changing the value of the /customer base/ will change, but the CLV will not.
- wccrawford 15y agoI stand corrected. Thanks guys.