Which of the Following Statements Does NOT Describe How Retailers

question 42

Multiple Choice

Which of the following statements does NOT describe how retailers use a customer lifetime value (CLV) ?

• A) CLV is used to identify and cater to the best and more profitable customers.
• B) CLV should be estimated under the assumption that the customer's future purchase behaviors will be the same as they have been in the past.
• C) Sophisticated statistical methods are typically used to estimate the future contributions from past purchases.
• D) An RFM analysis is often used by catalog retailers and direct marketers in estimating their customers' lifetime value.
• E) A customer who spends $800 twice a year has a higher CLV than a customer that spends $100 each month.

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