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A cable company spends on average $600 to acquire a customer. Over time, 80% of customers remain with the company from one year to the
- A cable company spends on average $600 to acquire a customer. Over time, 80% of customers remain with the company from one year to the next. The discount rate is 12%. Costs to serve each customer are: annual maintenance costs - $45; annual record-keeping and billing costs - $30. Revenue is as follows:
| Price per Month | % of Customers | |
| Basic Service | $30 | 50% |
| Premium Service | $50 | 40% |
| Super Premium Service | $80 | 10% |
- What is the annual profit margin for an average customer?
- What is the CLV for an average customer?
- What is the CLV for a Super Premium customer?
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Challenge Of Management Accounting Change
Authors: John Burns, Mahmoud Ezzamel, Robert Scapens
1st Edition
075066004X, 978-0750660044
