Which of the following is NOT a way to optimize LTV?
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Correct answer: Reducing customer retention rates.
Why this is the answer
Reducing customer retention rates directly decreases the average customer lifespan and, consequently, the Lifetime Value (LTV) of a customer. LTV is calculated based on the revenue a customer is expected to generate over their relationship with a company. Therefore, actions that lower retention will negatively impact LTV. Providing value-added products and services, implementing subscription models, and offering customer loyalty programs all aim to increase customer satisfaction, engagement, and loyalty, thereby extending the customer relationship and boosting LTV.
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