Belindas Lawn Service runs a radio ad during a slot that has 6,500 listeners. It costs her $1395. She anticipates an acquisition rate of 1.75%. She offers a special price for the first lawn mowing that will net her only $9. She expects the CLV of acquired customers to be $235.

6. What is her PLV?

7. Is the number you got for #6 good or bad? Justify your answer.

8. How many customers will she gain from this ad?

9. Assume that she has the option of running the ad in a different time slot, which has 12,000 listeners, but the ad would cost $1995. Assuming everything else stays constant, what would this PLV be?

10. Now assume she has a third option: run the ad in the middle of the night. The ad would only reach 1,000 customers, it would cost her $79, and her acquisition rate would be 0.35%. What would this PLV be?

11. Which of these three options has the lowest break even acquisition rate?

12. What is the average acquisition cost for #6?

13. What is it for #9?

14. What is it for #10?