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The Case for Maximizing Long-Term Customer Profitability Is Captured in the Concept

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Essay

The case for maximizing long-term customer profitability is captured in the concept of customer lifetime value.How is customer lifetime value calculated


Definitions:

Marginal Cost

The financial increase associated with the generation of one more unit of a product or service.

Average Variable Cost

The variable cost per unit of output, calculated by dividing the total variable costs by the quantity of output produced.

Market Price

The prevailing cost at which a service or product can be acquired or disposed of in a marketplace.

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