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  • July 2010 (Revised January 2017)
  • Background Note
  • HBS Case Collection

Marketing Analysis Toolkit: Customer Lifetime Value Analysis

By: Thomas Steenburgh and Jill Avery
  • Format:Print
  • | Language:English
  • | Pages:9
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Abstract

Customers are increasingly being viewed as assets that bring value to the firm. Customer lifetime value is a metric that allows managers to understand the overall value of their customer base and relate it to three customer strategies firms employ: asset acquisition—attracting new customers to the firm; asset maximization—maximizing the value the firm extracts from each customer; and asset retention—retaining existing customers for the long-term. The note gives students a foundation for analyzing marketing cases, as well as providing an analytical structure and process for completing a marketing plan. The note is accompanied by a free Excel worksheet that contains sample problems, prebuilt Excel models to calculate customer lifetime value, and charts and graphs that help visualize the results.

Keywords

Customer Lifetime Value; Return On Investment; Customer Acquisition; Customer Retention; Customer Churn; "Marketing Analytics"; Marketing; Customer Relationship Management; Customer Focus and Relationships; Customer Value and Value Chain; Management Analysis, Tools, and Techniques; Marketing Strategy; Measurement and Metrics; Strategic Planning; Value

Citation

Steenburgh, Thomas, and Jill Avery. "Marketing Analysis Toolkit: Customer Lifetime Value Analysis." Harvard Business School Background Note 511-029, July 2010. (Revised January 2017.)
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About The Author

Jill J. Avery

Marketing
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Related Work

    • July 2010 (Revised January 2017)
    • Faculty Research

    Marketing Analysis Toolkit: Customer Lifetime Value Analysis

    By: Thomas Steenburgh and Jill Avery
Related Work
  • Marketing Analysis Toolkit: Customer Lifetime Value Analysis By: Thomas Steenburgh and Jill Avery
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