Question
A television satellite operator launches a loyalty program by which points are granted for using satellite services. The points entitle the customer to a discount
A television satellite operator launches a loyalty program by which points are granted for using satellite services. The points entitle the customer to a discount on the price to upgrade the satellite receiver or other equipment such as a digital box. Customers who accumulate 1,000 points will receive $250 off the purchase price of any equipment. (In other words, one point has a $0.25 value.) During the first year of the program, customers had accumulated 1,920,000 points on total revenue of $7,800,000. The operator expects that 60% of the points granted will be redeemed. Of the points granted in the first year 640,000 were redeemed. How would the loyalty program be reflected in the first two years of launch? (Round percentage of total selling price calculations to 1 decimal place, e.g. 15.2% and final answers to 0 decimal places, e.g. 125.)
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