Question
Calculate the CLV based on the following assumptions Discount rate 6% Acquisition cost $ 30 Retention costs $ 10 Retention rate 80% Average customer contribution
Calculate the CLV based on the following assumptions Discount rate 6% Acquisition cost $ 30 Retention costs $ 10 Retention rate 80% Average customer contribution $50 INPUTS: CUSTOMER LIFETIME VALUE 1 2 3 4 Discount rate 5.00% Acquisition cost $ 25.00 Retention costs $ 15.00 $ 15.00 $ 15.00 Retention rate 90.00% 90.00% 90.00% 90.00% Average customer contribution $ 100.00 $ 100.00 $ 100.00 $ 100.00 OUTPUTS Cumulative retention 100.00% 90.00% 81.00% 72.90% Net contribution $ 75.00 $ 85.00 $ 85.00 $ 85.00 Expected average contribution $ 75.00 $ 76.50 $ 68.85 $ 61.97 Discount factor 1.05 Discount factor per period 1 1.05 1.1025 1.157625 $ 75.00 $ 72.86 $ 62.45 $ 53.53 CLV $263.83 350 35.88 12558 300 77.2 23160 94 70.84 6658.96 42376.96 For this question it's asking me the four following questions, I need a solution for them, please. These are the questions 1) take each of the assumptions listed at the top of the spreadsheet and plug them into the INPUTS section of the model 2) calculate the CLV based on the assumptions 3) evaluate the answer in the OUTPUTS section 4) in a short sentence on the spreadsheet, explain whether the organization should invest in this market segment and why.
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