Customer Lifetime Value-Value Matrix

The Customer Lifetime Value-Value Matrix is a 2x2 matrix that helps businesses identify the value of their customers over time. It divides customers into four categories based on their potential lifetime value and their current value.

At a very high level, the Customer Lifetime Value-Value Matrix is used in the context of business, marketing, finance.

Customer Lifetime Value-Value Matrix quadrant descriptions, including examples
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What is the Customer Lifetime Value-Value Matrix?

A visual explanation is shown in the image above. The Customer Lifetime Value-Value Matrix can be described as a matrix with the following quadrants:

  1. High Potential, High Value: Customers who have the potential to become long-term, loyal customers and are already providing a high level of value to the business (e.g. a customer who has been with the business for a long time and spends a lot of money)
  2. High Potential, Low Value: Customers who have the potential to become long-term, loyal customers but are currently providing a low level of value to the business (e.g. a customer who has just joined the business and has not yet spent much money)
  3. Low Potential, High Value: Customers who are currently providing a high level of value to the business but have a low potential to become long-term, loyal customers (e.g. a customer who has been with the business for a short time and spends a lot of money)
  4. Low Potential, Low Value: Customers who have a low potential to become long-term, loyal customers and are currently providing a low level of value to the business (e.g. a customer who has been with the business for a short time and spends very little money)

What is the purpose of the Customer Lifetime Value-Value Matrix?

The Customer Lifetime Value-Value Matrix is a 2x2 matrix that helps businesses identify the value of their customers over time. It divides customers into four categories based on their potential lifetime value and their current value. The four categories are: high potential, high value; high potential, low value; low potential, high value; and low potential, low value.

The high potential, high value customers are the ones that businesses should focus on. These are the customers that have the potential to become long-term, loyal customers, and they are already providing a high level of value to the business. These customers should be nurtured and given special attention in order to maximize their value.

The high potential, low value customers are the ones that businesses should invest in. These customers have the potential to become long-term, loyal customers, but they are currently providing a low level of value to the business. These customers should be given special attention in order to increase their value.

The low potential, high value customers are the ones that businesses should be aware of. These customers are currently providing a high level of value to the business, but they have a low potential to become long-term, loyal customers. These customers should be monitored in order to maintain their value.

The low potential, low value customers are the ones that businesses should avoid. These customers have a low potential to become long-term, loyal customers and they are currently providing a low level of value to the business. These customers should be avoided in order to minimize their impact on the business.


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What templates are related to Customer Lifetime Value-Value Matrix?

The following templates can also be categorized as business, marketing, finance and are therefore related to Customer Lifetime Value-Value Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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