The Primary Advantage of Segmenting Customers by Lifetime Value Is

question 146

Multiple Choice

The primary advantage of segmenting customers by lifetime value is:

• A) the opportunity to develop a different marketing program for each segment
• B) knowing how much each segment is worth
• C) its ability to increase sales and profits
• D) the opportunity to develop personalized communications with each customer

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Definitions:

Risk Aversion

The preference to avoid risk, where investors require higher returns to compensate for higher risk.

Expected Returns

The average of all possible returns for an investment, weighted by the likelihood of each outcome.

Standard Deviations

A statistical measure indicating the amount of variation or dispersion from the average or expected value, widely used in finance to assess investment risk.

Risk Premium

The extra return expected by investors for holding a risky asset over a risk-free asset, compensating them for the risk of loss.