Question

1. Calculate your Customer Lifetime Value (CLTV) as a grocery customer.
2. How should a grocery store segment its market? Why?
3. Create personas for each market segment the store should have.

Answer 1

In the market, CLTV is a forecast of net profit that is assumed to be the entire future customer relationship. Forecasting models can have different levels of refinement and accuracy, ranging from crude rich to the use of modern forecasting analysis techniques.

The value of a customer's life can also be defined as the monetary value of a customer relationship based on the present value of future cash flows planned from the customer relationship. Valuing customers' lives is an important concept because it drives companies to shift their focus from quarterly profits to the long-term health of customer relationships. The value of the customer’s life is an important indicator because it is the upper limit of the cost of acquiring a new customer. For this reason, it is important to calculate the return on advertising spent on marketing mix modeling.
Current value is the discounted amount of future cash flows: All future cash flows are multiplied by less than one carefully selected number before merging. Multiplication factors take into account how the value of money is reduced over time. The value of money, based on the intuitive capture time that everyone likes, will be paid sooner rather than later, but prefer to pay later. The multiplication factor depends on the selected discount rate (10% per annum) and the period before each cash flow occurs. For example, money earned after ten years must be discounted more than money earned for the next five years.