MKT 337 Lecture Notes - Lecture 16: Net Promoter, Churn Rate, Customer Development
Document Summary
Two sides of customer value: customer profitability, customer experience. Customer lifetime value: present value of all future streams of profits that an individual/org generates over the life of their business w/ the firm. Based on: profitability - acquisition & growth, retention patterns. Clv = m*(r/(1+i+r: m = profit r = retention rate i - discount rate. Increase effectiveness of acquisition programs: offer discounts & incentives, generate positive word of mouth. Net promoter score: method to diagnose customer sentiment that asks customers how likely they are to recommend the company and categorizes respondents into 3 categories: detractors, passives, promoters. Nps = % of promoters - % of detractors.
