CLV Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy

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  • Business model

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CLV is an important framework for business decision making. It provides a customer selection and resource allocation strategy that considers the entire customer lifecycle. The CLV framework consists of four steps:

  1. Customer Selection - Identify customers who are likely to be profitable over the long term.
  2. Customer Segmentation - Analyze customer segments and create sub-segments that are likely to have similar profitability characteristics.
  3. Resource Allocation Strategy - Determine which resources to allocate based on the customer segment and its profitability potential.
  4. Tracking Progress and Monitoring Performance - Track progress with respect to customer segments goals, and monitor performance of each segment against their targets
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