Question

please help and explain the correct answer with explanation

Customer equity includes the LTV of:

a. past and present customers

b. present and future customers

c. present customers only

d. past, present, and future customers

Answer 1

Ans: b. present and future customers

Customer equity is the sum of all customer lifetime values for a firm. In other words, we calculate each customer’s lifetime value and we total all of these values together to determine customer equity.

Customer equity = sum of all customer lifetime values of the current and future customers