Lifetime Value Analysis Can Show Marketers

question 60

Multiple Choice

Lifetime value analysis can show marketers:

• A) how much they can spend to acquire new customers
• B) how valuable their current customers are
• C) who their best customers are
• D) which products are at the end of their useful lives
• E) introduce new customers selectively to specific marketing actions

---

Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much contributes to covering fixed costs.

Total Gross Margin

This is the difference between sales revenue and the cost of goods sold, before deducting administrative and selling expenses.

Absorption Costing

An accounting method that includes both variable and fixed production costs in the cost of goods sold.

Total Gross Margin

A financial metric that measures the difference between revenue and the cost of goods sold, indicating the profitability of sales before deducting operating expenses.