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A company named Nyopoly uses its Name-Your-Own-Price (NYOP) website to sell a variety of high- quality merchandise, including clothing, shoes, jewelry, and handbags. Nyopoly
A company named Nyopoly uses its Name-Your-Own-Price (NYOP) website to sell a variety of high- quality merchandise, including clothing, shoes, jewelry, and handbags. Nyopoly has found that there is a lot of diversity across customers regarding their frequency of visits, bid levels, and retention rates. As a result, they have divided customers into five distinct segments: Bargain Hunters, Browsers, Bling Magnets, Gift Givers, and Sophisticates. The table below gives the expected annual monetary purchases (S), margin (%) and retention rate (%). Note, revenue is earned only on active customers (i.e., those who are retained from one year to the next). Annual Purchases Margin Earned Retention Rate Bargain Hunters $100 60% 30% Browsers $50 Gift Givers Bling Magnets Sophisticates $100 $150 $300 30% 45% 35% 30% 50% 60% 70% 60% 1) Use the Excel spreadsheet "CLV.xlsx" to calculate the expected Customer Lifetime Value for a representative customer from each of the five segments. For these calculations, use a 5-year time horizon and a 5% annual discount rate. (a) What is the Customer Lifetime Value for a Bargain Hunter? (.4 point) (b) What is the Customer Lifetime Value for a Browser? (.4 point) (c) What is the Customer Lifetime Value for a Gift Giver? (.4 point) (d) What is the Customer Lifetime Value for a Bling Magnet? (.4 point) (e) What is the Customer Lifetime Value for a Sophisticate? (.4 point)
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