Why Might a Company Try to Determine the Lifetime Value

question 88

Essay

Why might a company try to determine the lifetime value of a customer? What must a company do to determine this information?

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Definitions:

Authority decisions

decisions made by individuals in positions of power within an organization, often without extensive consultation.

Escalating commitment

A decision-making process where individuals or organizations continue to invest in a failing course of action due to the significant resources already spent.

Non-programmed Decision-Making

The process of making decisions in unpredictable and unique situations, requiring creative and critical thinking beyond routine procedures.

Satisficing

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution, due to constraints.