MATHEMATICAL MODELING OF THE CUSTOMER LIFETIME VALUE IN CRM

With an increase in understanding of the importance of customer loyally, firms are taken a more customer - centric an approach to strategy formulation and, as a result, customer life cycle and lifetime value has taken a central role in marketing strategy. These tools allow us to differentiate between customers who are more profitable than others rather than simply examining average profitability. Customers who experience more responsive sellers will benefit as well. Customer lifetime value should gain in Czech Republic increasing importance as a marketing metric in both academia and practice. The LTV (lifetime value) models shall be conducive to the development of this scientific discipline in the circumstances of the CRM as we still lack a standard theoretical instrument (model) of the customer lifetime value with respect to factors affecting it. LTV is one metric that that help us assess the return on marketing investment.