TITLE:
A Numerical Approach to the Customer Lifetime Value
AUTHORS:
Darkhijav Bayanjargal, Batsukh Davaasuren, Rentsen Enkhbat
KEYWORDS:
Customer Lifetime Value, Discount Rate, Retention Period, Newton’s Method
JOURNAL NAME:
iBusiness,
Vol.10 No.2,
June
7,
2018
ABSTRACT: In this paper, we show that it is
possible to estimate discount rate or cost of capital in the calculation of
customer lifetime value (CLV) for a company using numerical methods instead of the traditional
financial approaches. We propose an estimation formula for retention period
that the company should keep the customers in order to gain certain benefit
from them. We also apply our theoretical approaches to the Mongolian mobile service
at company level using statistical data from 2005 to 2016. Some numerical
results are included.