Simplified Models
It is often helpful to estimate customer lifetime value with a simple model to make initial assessments of customer segments and targeting. Possibly the simplest way to estimate CLV is to assume constant and long-lasting values for contribution margin, retention rate, and discount rates, as follows :
Read more about this topic: Customer Lifetime Value
Famous quotes containing the words simplified and/or models:
“I have simplified my politics into an utter detestation of all existing governments; and, as it is the shortest and most agreeable and summary feeling imaginable, the first moment of an universal republic would convert me into an advocate for single and uncontradicted despotism. The fact is, riches are power, and poverty is slavery all over the earth, and one sort of establishment is no better, nor worse, for a people than another.”
—George Gordon Noel Byron (1788–1824)
“The parents who wish to lead a quiet life I would say: Tell your children that they are very naughty—much naughtier than most children; point to the young people of some acquaintances as models of perfection, and impress your own children with a deep sense of their own inferiority. You carry so many more guns than they do that they cannot fight you. This is called moral influence and it will enable you to bounce them as much as you please.”
—Samuel Butler (1835–1902)