Answer :
CLV is essential for designing customer loyalty programs, as it allows businesses to understand the long-term value of customers and tailor rewards to maximize engagement and profitability. Higher CLV customers may receive better rewards, aligning program costs with long-term returns. Understanding CLV enables strategic allocation of loyalty program resources and highlights the importance of customer retention and satisfaction.Hence option A evapotion is the correct answer.
The impact of Customer Lifetime Value (CLV) on the design of customer loyalty programs is pivotal in that it helps businesses understand the monetary value of a customer over the entire relationship rather than a single transaction.
Since CLV represents the total worth of a customer to a company over time, managers can use it to tailor loyalty programs efficiently. For example, businesses can determine how much investment in loyalty program rewards is justified based on the projected CLV of different customer segments.
By leveraging CLV, companies avoid a one-size-fits-all approach and design loyalty programs that are economically viable and maximize long-term customer engagement.
For instance, a customer with a high CLV might be offered more personalized and exclusive rewards than one with a lower CLV. This strategic approach to loyalty programs ensures that resources are allocated where they are most likely to generate a significant return on investment.
Additionally, understanding CLV enables businesses to identify high-value customers and foster deeper relationships with them, creating a more intimate and profitable long-term interaction.
Unlike cooperatives and mutuals, loyalty programs do not offer customers control or ownership but provide economic benefits to incentivize repeat purchases and sustained loyalty.
Hence option A evapotion is the correct answer.
