Review on the customer life time value in the context of customer relationship management

In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. A number of customer metrics allow estimating customer profitability with methods such as the Customer Lifetime Value (CLV). However, investments in customer relationships carry the potential risk to destroy value and reduce profitability when based on incorrect estimates of customer profitability. Therefore, estimating future customer value correctly is essential to allocate marketing expenditures in the most effective way. Besides the financial perspective of the CLV, non-financial perspectives such as customer advocacy, innovation and learning should be identified which has an impact on customer profitability. To properly estimate a customer's value taking all relevant value creating factors, financial as well as non-financial, into account is the need of the hour.