ATZ Inc., a company that provides wireless telecommunications network in the town for many years. As the marketing advisor of the company, you have recently conducted a survey to assess performance of the companys 5,000 retained customers. As a result, you found that 40% of these customers has a long customer history with loyalty index of 85, high purchase amount with loyalty index of 78, repurchase desirability with above average loyalty index of 55, product preference with below average loyalty index of 45, and most of these customers did not want to recommend ATZ services to other potential customers. These customers are clearly somewhat dissatisfied, but since ATZ Inc. is the only wireless telecommunications network provider in the country they are compelled to use it.

Section Table (I): LIFETIME VALUE OF A CUSTOMER (NPV) YEARS( 1 2 3 4 5 7 Revenue From Customer 5 - $ 18000 $ 1,998.00 $ 2.1974 $ 2.330.47 $ 2.516.90 $2.71526 2.93572 $ 3.170.57 342422 89 89 89 89 89 89 89 84 S 5 - 5 . -S 5 - S - S 5 36015 Growth in Sales Revenue Gross Profit Contribution (79) Acquisition Costs Marketing & Advertising Expenses Retention Conta (other Sales & General Admin Expenes) Na Marketing Prote (Net Marketing Contribution Dinomunt Rate 5 250.00 250,00 250.00 50.00 290.00 250,00 250.00 230,00 25000 5 (3000.15) . . . S S . . 199 Present Value Multiplier 1 0.870 0.756 0.572 0.297 0.432 376 0.327 0.284 Net Prest Value (NPV) 5 5 - S 5 $ S . IS . Customer Lifetime Value Section 3 4 8 Table (2): LIFETIME VALUE OF A CUSTOMER (NPV) YEARS (N) . Revenue From Customer $ 1,850.00 $ 1.942.50 S % Growth in Sales Revenue Gross Profit Margin 2.039.63 S 2,141.61 5% 5% 596 s s $ s S 360.15 Acquisition Costs (Marketing & Advertising Expenses) Retention Costs (other Sales & General Admin Expenses) Net Marketing Profit (Net Marketing Contribution) S 250.00 S 250.00 S 250.00 S 250.00 S (360.15) S s s S Discount Rate 15% Present Value Multiplier 1 0.870 0.756 0.658 0.572 Net Present Value (NPV) s s s s . s Customer Lifetime Values . Section Graphi 100 LC. RCO CC. Customer Lifetime Value (Purchase amount) Note: LC Loyal Customer RC Repeat Customen. CCCaptive NC New Customers U profitable Comer NC. UC 100 25 SO 75 Customer Loyalty Index (CLI) Score 2 If most of these same customers are attracted by the business competitors and decided not to use the company's services, resulting little above average repurchase amount of 65, above average repurchase desirability with loyalty index of 58 and product preference with loyalty index of 40; then decide what type of customer would these customers appear on the Graph 1 above? 3 Because ATZ Inc. is the only wireless telecommunications network provider in the town and most of its customers are required to use the services, therefore the average customer life of each customer is 9 years. However, more and more customers are attracted by the company's competitors in recent years resulting in average customer life of these customers is five years shorter. Then, determine what change in customer retention (%change in CR)? ATZ Inc., a company that provides wireless telecommunications network in the town for many years. As the marketing advisor of the company, you have recently conducted a survey to assess performance of the company's 5,000 retained customers. As a result, you found that 40% of these customers has a long customer history with loyalty index of 85, high purchase amount with loyalty index of 78, repurchase desirability with above average loyalty index of 55, product preference with below average loyalty index of 45, and most of these customers did not want to recommend ATZ services to other potential customers. These customers are clearly somewhat dissatisfied, but since ATZ Inc. is the only wireless telecommunications network provider in the country they are compelled to use it. Section Table (I): LIFETIME VALUE OF A CUSTOMER (NPV) YEARS( 1 2 3 4 5 7 Revenue From Customer 5 - $ 18000 $ 1,998.00 $ 2.1974 $ 2.330.47 $ 2.516.90 $2.71526 2.93572 $ 3.170.57 342422 89 89 89 89 89 89 89 84 S 5 - 5 . -S 5 - S - S 5 36015 Growth in Sales Revenue Gross Profit Contribution (79) Acquisition Costs Marketing & Advertising Expenses Retention Conta (other Sales & General Admin Expenes) Na Marketing Prote (Net Marketing Contribution Dinomunt Rate 5 250.00 250,00 250.00 50.00 290.00 250,00 250.00 230,00 25000 5 (3000.15) . . . S S . . 199 Present Value Multiplier 1 0.870 0.756 0.572 0.297 0.432 376 0.327 0.284 Net Prest Value (NPV) 5 5 - S 5 $ S . IS . Customer Lifetime Value Section 3 4 8 Table (2): LIFETIME VALUE OF A CUSTOMER (NPV) YEARS (N) . Revenue From Customer $ 1,850.00 $ 1.942.50 S % Growth in Sales Revenue Gross Profit Margin 2.039.63 S 2,141.61 5% 5% 596 s s $ s S 360.15 Acquisition Costs (Marketing & Advertising Expenses) Retention Costs (other Sales & General Admin Expenses) Net Marketing Profit (Net Marketing Contribution) S 250.00 S 250.00 S 250.00 S 250.00 S (360.15) S s s S Discount Rate 15% Present Value Multiplier 1 0.870 0.756 0.658 0.572 Net Present Value (NPV) s s s s . s Customer Lifetime Values . Section Graphi 100 LC. RCO CC. Customer Lifetime Value (Purchase amount) Note: LC Loyal Customer RC Repeat Customen. CCCaptive NC New Customers U profitable Comer NC. UC 100 25 SO 75 Customer Loyalty Index (CLI) Score 2 If most of these same customers are attracted by the business competitors and decided not to use the company's services, resulting little above average repurchase amount of 65, above average repurchase desirability with loyalty index of 58 and product preference with loyalty index of 40; then decide what type of customer would these customers appear on the Graph 1 above? 3 Because ATZ Inc. is the only wireless telecommunications network provider in the town and most of its customers are required to use the services, therefore the average customer life of each customer is 9 years. However, more and more customers are attracted by the company's competitors in recent years resulting in average customer life of these customers is five years shorter. Then, determine what change in customer retention (%change in CR)? ATZ Inc., a company that provides wireless telecommunications network in the town for many years. As the marketing advisor of the company, you have recently conducted a survey to assess performance of the company's 5,000 retained customers. As a result, you found that 40% of these customers has a long customer history with loyalty index of 85, high purchase amount with loyalty index of 78, repurchase desirability with above average loyalty index of 55, product preference with below average loyalty index of 45, and most of these customers did not want to recommend ATZ services to other potential customers. These customers are clearly somewhat dissatisfied, but since ATZ Inc. is the only wireless telecommunications network provider in the country they are compelled to use it