The customer Lifetime Value (LV) is the amount of margin contributed by the average customer over the average length of time the customer remains with the company. It is perhaps the single most important measure of the effectiveness of the marketing effort, indeed of the overall performance of the company's management.   My role is to develop programmes designed to increase the LV and the extent to which this is achieved is a measure of the value of my services   The basic customer LV can be increased by improving the retention rate thus increasing the time that the average customer stays with the company and by increasing the sales/margins generated by the average customer.   Retention is vital - it is generally accepted that it costs 5-7 times as much to locate a new customer as it does to retain an existing one.     This however is but part of the story. The real payoff comes by converting "Satisfied customers" into "Loyal" ones. "Satisfied" is not synonymous with "Loyal"     Various surveys show that over 60% of companies that switched suppliers were satisfied, or very satisfied, with their previous one.     Compared to the satisfied customer the loyal customer will: be less inclined to switch suppliers, stay longer, buy more, give you a higher percentage of their total sales and be more forgiving of your mistakes - all very desirable benefits, but not the most important one.     The primary benefit is that the loyal customer will act as an advocate for your company. The satisfied customer will recommend you when asked while the loyal customer can be encouraged to actively promote your company and refer others to it.     Converting satisfied customers into loyal ones involves techniques and systems, not the least being database management, but even more important is creating a company culture that is genuinely based on giving superior customer service. If your employees aren't loyal to the company then you can't expect your customers to be.