Which metric pair is commonly used to assess long-term customer profitability?

• A. Profit per unit and gross margin.
• B. Churn rate and revenue growth.
• C. Lifetime value and churn.
• D. Accounts payable turnover and inventory turnover.

Answer: (C)

Long-term customer profitability looks at how much value a customer generates over the entire relationship. The pair of lifetime value and churn is ideal for this because lifetime value estimates the total net profit a customer will produce across their time with the business, while churn measures how quickly customers stop buying. Together they show not just what you earn from a customer now, but how long that revenue will last and how durable the profit is. This combination also guides strategy on how much to invest in acquiring and retaining customers: if churn is low and lifetime value is high, you can justify higher acquisition spend; if churn is high or lifetime value is low, profitability suffers and retention or pricing adjustments become priorities. The other pairs don’t directly reflect how profitable a customer relationship will be over many purchases—one focuses on product-level margins, another on operational efficiency, and another mixes retention with growth without tying it to total expected profit.