Finance
Customer lifetime value
Estimate customer spend over their lifetime with the company.
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Customer lifetime value vs Customer value proposition
These models cover closely related ground. Compare their purpose, scope, practical guidance, and supporting resources to choose the better fit.
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Marketing
Customer value proposition
Create a compelling purchase motive.
Read articleChoice logic
Use this when.
Use it to estimate the economic contribution of a customer over the relationship.
To create a compelling purchase motive.
Extracted signals
Strengths, limits, and pitfalls.
Customer lifetime value
- Use contribution after all customer specific acquisition, service and retention costs—not revenue—as the economic input.
- Refresh the model whenever the offer, cost structure or customer behaviour changes.
Watch for
- Do not value future cash as if it arrived today. Discount it to net present value and expose the retention and spend assumptions driving the result.
Customer value proposition
- Write for a specific decision maker in a specific segment, then test the words with real customers. A proposition becomes useful only when the target audience understands it, values it and believes the proof.
- The manufacturer redesigned the product around faster drying so contractors could apply two coats during a single eight hour shift. The launch proposition led with productivity and treated environmental compliance as supporting value. Customers accepted the improved resin at a 40 per cent premium because the economic benefit was concrete and credible.
Watch for
- Do not confuse difference with value. An offer may differ from competitors in many ways, but a CVP should feature only the distinctions that materially improve the target customer’s outcome and can be defended in delivery.
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Application bridge
Related templates.
Program Benefits Sustainment PlanProgram Benefits Sustainment Plan Purpose. Use this plan to maintain the conditions that allow programme benefits to continue accruing after transition. It turns the handover commitments in the benefits transition plan into enduring operational mechanisms, measures, responsibilities and responses. Application. Treat it as a living document. Customer demand, operating capacity, technology, regulatiBenefits Realization ReportBenefits Realization Report Purpose. Use this report to show which programme benefits were realised during a defined period, which expected benefits were delayed or missed, and which new benefits have emerged. Each entry should trace to the business case and benefits-realisation plan so decision-makers can distinguish delivered value from completed activity. Application. Benefits become meaningfulProgram Quality ChecklistProgram Quality Checklist Purpose. Use this checklist to gather consistent evidence about the quality of programme deliverables, services, management outcomes and cost or schedule performance. Application. It can structure a quality review meeting or inform questions for sponsors, customers, beneficiaries and end users. Tailor each verification question to a defined requirement or acceptance criteKnowledge Management PlanKnowledge Management Plan Purpose. Use this plan to connect programme participants with useful knowledge, subject-matter expertise and the information created across components. Effective knowledge management reduces reinvention and duplicate work, helps people find proven answers quickly and reserves scarce expert attention for problems that genuinely require new thinking. Application. Prepare th