Activity: VLC

Assume that a customer in the small contractor target market segment buys an electric drill on average every five years $($or every $0\mathrm{.}2$ year$)$ for $$100,$ when the gross margin on the drill averages $30$ percent. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

Open spreadsheet

Questions

What is the value of a loyal customer $($VLC$)$ if the customer retention rate is $20$ percent? Round your answer to the nearest cent.

$

What is the value of a loyal customer $($VLC$)$ if the customer retention rate increases to $80$ percent? Round your answer to the nearest cent.

$

What is a $1$ percent change in market share worth to the manufacturer if it represents $150,000$ customers? Round your answers to the nearest dollar.

$20$ percent customer retention rate case: $

$80$ percent customer retention rate case: $