For channel LTV, what two elements multiply to give LTV?

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Prepare for the WGU MKTG 6040 D381 E-Commerce and Marketing Analytics Exam. Use flashcards and multiple choice questions with hints and explanations. Ensure your success on this crucial exam!

Multiple Choice

For channel LTV, what two elements multiply to give LTV?

Explanation:
Channel lifetime value measures the total revenue a typical customer generates from a specific channel over the time they remain a customer. The two factors that determine that revenue are how much the customer spends on average per order (average order value) and how often they place orders (purchase frequency). Multiply these together to estimate the total revenue a customer brings from that channel. Other options mix in costs or different metrics that relate to acquisition, traffic, or profit, but they don’t directly quantify the revenue generated per customer from purchases alone.

Channel lifetime value measures the total revenue a typical customer generates from a specific channel over the time they remain a customer. The two factors that determine that revenue are how much the customer spends on average per order (average order value) and how often they place orders (purchase frequency). Multiply these together to estimate the total revenue a customer brings from that channel. Other options mix in costs or different metrics that relate to acquisition, traffic, or profit, but they don’t directly quantify the revenue generated per customer from purchases alone.

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