Capturing Value from Customers Customer Loyalty and Retention • Lifetime value is the stream of profits a customer will create in the life of a business relationship
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– average life is determined through surveys or guest history
• It measures how much a member of a market segment produces per year, multiplied by the average life of a member of that segment. – Ritz-Carlton knows the life-time value of its loyal customer is over $100,000 over their lifetime. – a restaurant customer can be worth several thousand dollars’ worth of business – a travel agency customer can generate over $50,000 during his/her lifetime by using the agency Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens
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