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The Customer Lifetime Value Equation: Will It Pay Off for Tech Companies?

December 7th, 2011

Episode 15 of 882 episodes

Amazon will lose money on each Kindle Fire it sells. Sprint is not expected to turn a profit selling Apple's iPhone for at least three years. Both companies are banking on customer lifetime value (CLV), a marketing formula based on the idea of spending money up front to gain customers whose loyalty will reap rewards over the long term. The model is becoming more and more popular among technology companies, and as software companies increasingly turn to subscription-based business models through cloud computing, CLV will become an even larger issue, according to Wharton experts.

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