Question

Question 6 Professor Fader discussed "salesperson of the month." What would he say is the best way to pick a salesperson of the month?

Answer 1

Answer:

The best way for Professor Fader to pick the Salesperson of the Month is to measure the change in total customer lifetime value for that month delivered and give the award to the salesperson with the highest points.

Explanation:

Total Customer Lifetime Value (CLV) refers to the total value delivered by a customer over a particular period not just in the number of purchases they have made. A customer's value also includes, but is not limited to:

The formula for calculating CLV is by:

(Annual Customer Revenue X Lenth of Relationship in Years) - (Total costs of acquiring plus Total Cost of  Serving the customer)

or  

(ACR x LR)-(TCA+TCS) = CLV

Cheers!