iBusiness, 2018, 10, 85-91 http://www.scirp.org/journal/ib ISSN Online: 2150-4083 ISSN Print: 2150-4075 DOI: 10.4236/ib.2018.102005 Jun. 7, 2018 85 iBusiness A Numerical Approach to the Customer Lifetime Value Darkhijav Bayanjargal 1 , Batsukh Davaasuren 2 , Rentsen Enkhbat 2 1 School of Applied Science and Engineering, National University of Mongolia, Ulaanbaatar, Mongolia 2 Business School, National University of Mongolia, Ulaanbaatar, Mongolia Abstract In this paper, we show that it is possible to estimate discount rate or cost of capital in the calculation of customer lifetime value (CLV) for a company using numerical methods instead of the traditional financial approaches. We propose an estimation formula for retention period that the company should keep the customers in order to gain certain benefit from them. We also apply our theoretical approaches to the Mongolian mobile service at company level using statistical data from 2005 to 2016. Some numerical re- sults are included. Keywords Customer Lifetime Value, Discount Rate, Retention Period, Newton’s Method 1. Introduction Customers are one of the main assets of a company that should be assessed and regulated. Customer lifetime value (CLV) is gaining increasing importance as a marketing metric in both academia and practice [1]. The literature has generally defined CLV in many ways that differ subtly. For example, Dwyer (1997) defined CLV as the present value of the expected benefits (e.g., gross margin) less the burdens (e.g., direct costs of servicing and communicating) from customers. Kumar, Ramani and Bohling [2] defined CLV as the sum of cumulated cash flows discounted using the weighted average cost of capital of a customer over his or her entire lifetime with the firm [3]. Estimating the Customer lifetime value gives an opportunity to predict future investments and benefits of a com- pany from its customers. Customer lifetime value models mainly focus on the estimation of customer How to cite this paper: Bayanjargal, D., Davaasuren, B. and Enkhbat, R. (2018) A Numerical Approach to the Customer Life- time Value. iBusiness, 10, 85-91. https://doi.org/10.4236/ib.2018.102005 Received: February 11, 2018 Accepted: June 4, 2018 Published: June 7, 2018 Copyright © 2018 by authors and Scientific Research Publishing Inc. This work is licensed under the Creative Commons Attribution International License (CC BY 4.0). http://creativecommons.org/licenses/by/4.0/ Open Access