Question
Assume that a company is selling a subscription to a car cleaning service for $20.00 per month and the average customer lifetime is 30 months.
Assume that a company is selling a subscription to a car cleaning service for $20.00 per month and the average customer lifetime is 30 months. Their marketing department has found that running online ads at $5000 per ad attracts 100 customers and purchasing a billboard for $3000 attracts 50 customers. Based on the information above, please answer the following questions. You need to show the calculations in your answers.
(1) What is the CLTV?
(2) For online ads, what is the CAC?
(3) For online ads, what is the CLTV:CAC ratio?
(4) For billboard, what is the CAC?
(5) For billboard, what is the CLTV:CAC ratio?
(6) Which marketing channel is better? Online ads or billboard? Why?
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International Macroeconomics
Authors: Robert C. Feenstra, Alan M. Taylor
Fourth Edition
1319061729, 978-1319061722
