Caselet 3 Answer

CLV has certain inefficiency due to the cross-dependence between each of the individual input variables such as retention rate, marketing spend and discount rate etc.

Sensitivity analysis was undertaken for each of the input variables identifying that the retention rate had the strongest influence on CLV with marketing spend and discount rate offering moderate influences.
To effect a 15% variation in the CLV model calculation would require +9% or a -10% change respectively in the retention rate.

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