Making pricing decisions with CLV

OK, we have seen how CLV is calculated in the previous article, and now it’s time to put it to action. If you are not clear which kind of inputs you can use to calculate Customer Lifetime Value, make sure you read part I and come back to this one:

So why would we want to use CLV to inform our pricing decisions? Like I mentioned in the previous article, the CLV is the foundation of customer value management, so tracking this metric will help us understand how much economic value our product is creating across customer segments. The key…

Calculating Customer Lifetime Value (CLV)

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The CLV is an important metric in modern product development, but sadly, it often gets overlooked. Most likely because it’s often thought of as a metric reserved for sales and direct marketing functions. In a nutshell, the CLV forms the foundation of Customer Value Management, so tracking this metric can help product managers understand how much monetary value is created across customer segments as a result of new product releases and fixes.

The best cross-functional product teams will refer to quarterly/yearly CLV as part of their KPIs in order to gauge value created for specific segments. After all, modern product…

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Starting from linear search

One of the first things you learn when you start programming (at least in JS) is the famous “for-loop” — a kind of linear search — with which you can traverse a set of values to find a particular one or test for a subset that meets specific criteria. For the most part, that works quite well, like when you are developing low-traffic apps or working with small datasets. But as complexity and performance requirements increase, you will need to reach for a different algorithm like binary search. Before doing that, though, let’s first take a quick look at a…

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Today, iterating over long lists of data-points to find which one is unique has become a common business logic operation. Think of a full-stack application like a CRM (customer resource management), or an analytics app focusing on filtering and rendering insights about sales data. You can also think of an example closer to home like the filtering features in Microsoft Excel. If you ever had to analyse or compare structured data, you have probably already used the “Filter for Unique Values” or “Filter for Duplicates” functionality. …

Stephanos Theodotou

I’m a product manager and developer. I’ve just started writing about what I learn and find fascinating.

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