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3. Is the price of acquiring a new online customer worth the cost? Provide documentation using numbers in the case. Acquisition Costs $50 credit 1500*6*50
3. Is the price of acquiring a new online customer worth the cost? Provide documentation using numbers in the case. Acquisition Costs $50 credit 1500*6*50 = $450,000; 20,988 new customers; cost per customer $126.26; monthly margin $12.24; number of months to recover = 11 months; will clients stay long enough to make that back? Advertising campaign $2.000.000 Cash sweepstakes $ 200,000 New online customers 24,000 -Acsssitiensesteercustomer _w Expected monthly earnings per new online customer . (per month) mums-Imm- Revenues Net interest revenue Eeespaid Total revenues Expenses Branch ATM Telephone - VRU Telephone - Service Rep Online Total costs Net Income Within the sixmonth promotion period from July 2001 to December 2001, Great Dakota would earn $60.33 for migrators and $70.27 per new acquisition. The cost of acquisition exceeds the earnings during the promotion period, which may help explain the decrease to the bottom line. However, Great Dakota would be able to recoup the acquisition costs for each new online customer within a year, assuming all customers are retained. The yearly expected revenues less expenses for migrators is $120.66 and $140.53 for new acquisitions, which is greater than the
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