What are the two types of Customer Lifetime Value (CLV) mentioned in the chapter, and how do they differ?

The two types of Customer Lifetime Value (CLV) mentioned are historic CLV and predictive CLV. Historic CLV calculates the total revenue generated from a customer based on past purchases, while predictive CLV uses historical data and AI to forecast future customer value and relationship duration.

Historic CLV is straightforward, based on actual past purchases to determine the total revenue a customer has contributed over their lifetime. For example, if a customer bought a product multiple times over several years, their historic CLV would be the sum of those purchases. In contrast, predictive CLV goes beyond historical data by utilizing AI to estimate how long the customer relationship will last and the future value it may generate, allowing businesses to make informed decisions about customer engagement and investment.