Which metric captures the total profit a customer is expected to generate before termination?

• A. Lifetime Value
• B. Customer Churn
• C. Opportunity Management
• D. Sales Productivity Formula

Answer: (A)

Lifetime value is the measure of the total profit a customer is expected to generate over the entire span of their relationship with the company, up to termination. It combines projected revenues from that customer with the costs of serving and acquiring them, giving a forecast of net profitability across the whole lifetime. This metric guides decisions on how much to invest in acquiring and retaining customers, pricing, and marketing strategies, since it tells you how valuable each customer truly is over time.

Churn, by contrast, focuses on the rate at which customers stop doing business, not the total profit they will generate. Opportunity management is about tracking potential deals in the sales pipeline, not the long-term profitability of a customer. The sales productivity formula measures efficiency or output in the sales process, not the cumulative profitability of an individual customer.