Originally Posted by
canadiancow
Why?
Is someone who flies 67,000 miles in J not worth more than someone who flies 10,000 miles in J?
Yes. Anyone who argues this has not done marketing 101. I can't be bothered with the math, but it's much more than just basic math.
http://en.wikipedia.org/wiki/Customer_lifetime_value
CLV (customer lifetime value) calculation process consists of four steps:
forecasting of remaining customer lifetime (most often in years)
forecasting of future revenues (most often year-by-year), based on estimation about future products purchased and price paid
estimation of costs for delivering those products
calculation of the net present value of these future amounts[5]