Understanding churn and customer lifetime value (LTV) is crucial for businesses as it significantly impacts customer retention strategies and ultimately the company's profitability.
Churn rate reflects the percentage of customers who discontinue their relationship with a company, and is critical for calculating customer lifetime value (CLTV) and shaping retention strategies.
Calculating customer lifetime value allows companies to assess how much revenue a customer will generate throughout their lifespan, which is vital for forecasting and strategic planning.
Engaging existing customers can be significantly more cost-effective than acquiring new ones; thus, understanding churn and LTV directly contributes to better budget allocations.
#churn-prediction #customer-lifetime-value #customer-retention #business-analytics #marketing-strategies
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