how much are you worth to a given company if you continue to purchase its brand for the rest of your life?many marketers are grappling with that question , but it si not easy to determine that how much a customer is worth to a company over his or her lifetime. calculating customer lifetime value can be very complicated. intuitively, how ever, it can be simple fairly a net present value calculation . to determine a basic customer lifetime value, each stream of profit is discounted back to its present value and then summed. the basic equation for calculating net present value is
NPV=
assume that a customer shops at a local grocery store spending an average of rs. 2500 a week and that the retailer earns a five percent margin. calculate the customer lifetime value if this shopper remains loyal over a ten year life sapn assuming a five percent annual ineterst rate and no initial cost to aquire the customer