Lifetime Value of Customer

731 Words3 Pages
Lifetime Value of Customer The firm chosen to analyze is Anugraha Jewellers. The company was incorporated in 1994. The company is based in India and it manufactures and sells gold jewellery. The lifetime value of a customer is an essential metric for business owners who wish to capture the profits associated with customer loyalty. The process starts by collecting data on existing customers and then extrapolating that data to predict the value of potential customers. For the present company under study, financial data were collected (Moneycontrol.com, 2012) and used as applicable to evaluate some metrics related to customer lifetime value. The total number of customers is not usually listed on these financial statements so per customer calculations are restricted. Many companies focus on getting new customers and while new customers help to ensure the growth of the company, they may not be as profitable as the returning customers since there is a cost to acquiring new customers. The revenue per customer is tracked by determining the average amount spent per purchase by the customer. Since the firm under study is custom jewellery this data may be easily tracked. The profit and loss statement shows sales for successive twelve month periods. The revenue per customer is obtained by dividing the revenue by the average number of customers. The profit per customer may be obtained once certain other data are collected. For example the cost per new customer may be determined
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