How much money will this customer bring me?

Knowing how much each and every one of your customers is worth is invaluable. You can forecast revenue. Not all customers are profitable. You may have some who call in all the time, or return a lot of merchandise, or utilize your services too much (e.g, emergency roadside assistance).

You can also use Lifetime Value to determine how hard you want to work in order to retain each customer. For instance, if we learn Customer Y is likely to churn, how much do you incentivize that customer to stay? If they have already left, how much do you want to offer them to come back?

Do I need to offer a discount or will this person buy my product anyway?

Many companies give everyone a discount. This is unnecessary, because some people will buy anyway, without a discount.

Knowing who these people are will save you money and grow your bottom line.

What impact do my competitors have?

Each business has a trade area. What happens when a competitor’s trade area overlaps with yours? How many customers do you lose? And how do you entice these customers to visit your business instead of your competitors?