What you use to measure your success often defines your vision and your strategy. If your goal is more customers, you can get them, but they may not be profitable. Fleet Bank discovered that half of their existing customers are not profitable to the bank.
Many retailers have the idea that sales and discounts are the road to success.
They may actually be the road to ruin. Lifetime value is the net present value of the profit to be realized on the average new customer during a given number of years. It is a wonderful concept, and can be an excellent guide to profitable strategy. For a retailer, that means that you have to get your customers to use a plastic member card, or to record their credit cards with you so you can keep track of their spending. Use the data to segment your customers by profitability.