Which factor does NOT directly contribute to customer lifetime value?

Customer lifetime value (CLV) is a crucial metric used to estimate the total revenue that a business can expect from a single customer over the entirety of their relationship. To accurately calculate CLV, certain factors are essential, while others may not have a direct influence.

The market share of a company pertains to the portion of an industry or market's total sales that is earned by a particular company over a specified time period. While market share can provide insights into a company's overall performance and competitive positioning, it does not directly affect the calculation of customer lifetime value. CLV is more concerned with the direct interactions and transactions that occur between a company and its customers.

In contrast, average purchase value, customer retention rate, and frequency of purchases all play integral roles in determining CLV. Average purchase value refers to how much customers spend in a single transaction, while frequency of purchases indicates how often customers make those purchases. The customer retention rate measures how well a company retains its customers over time, directly impacting the ongoing revenue generated from those relationships. Therefore, these three factors contribute directly to calculating CLV, while market share serves as a broader market metric rather than a determinant of individual customer value.