CLV = Customer Lifetime Value:
When the left wing board member idiots chase away fans/customers/buyers to promote Social Justice Warfare/Welfare BS, often those customers will stay away for their lifetime.
P&G, Nike, pro football and fill in the blank_______________ have ended their relationship with millions of Deplorables customers with their Justice Warfare BS marketing.
These idiots depending on the millennials to bail them out, may be even more stupid than pushing SJW BS.
CLV aka Customer Lifetime Value:
The model for customer cash flows treats the firm’s customer relationships as something of a leaky bucket. Each period, a fraction (1 less the retention rate) of the firm’s customers leave and are lost for good.[1]
The CLV model has only three parameters: (1) constant margin (contribution after deducting variable costs including retention spending) per period, (2) constant retention probability per period, and (3) discount rate. Furthermore, the model assumes that in the event that the customer is not retained, they are lost for good.
Customer Lifetime Value:
https://en.wikipedia.org/wiki/Customer_lifetime_value
Personally I think they are missing a parameter. There is an buried assumption reflected in either the margin or the retention that assumes an individual will not ‘shop around’ for the same product and service every time they need it.
For example: I buy Folgers coffee and I drink about 1 red bucket every month. However, I will buy multiples of those red buckets every time I see a sale that is about a $1 below the standard price combined with a coupon - WHEREVER it is advertised. In this locale it’s either: CVS, Walgreens, Giant Eagle, Marcs, Heinen’s, Walmart, or Target that typically have those sales.
Thus the retailers, provided they aren’t breaking the law and violating anti-trust through coordinating sales price/timing and customer data, cannot predict accurately what my retention and/or margin will be.
They can predict the lemmings who do 100% of their shopping in one place all the time independent of price - but they don’t need to worry about them and the calculation isn’t meant for them. They rarely complain and don’t require retention.