Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Caprini's biggest customers in California are independent beauty supply retailers, who buy products for resale. It costs Caprini $ 5 1 5 to acquire one

Caprini's biggest customers in California are independent beauty supply retailers, who buy products for resale. It costs Caprini $515 to acquire one pf these retailers as a customer, and the company spends an average of $239 per year to connect with and retain existing customers. A typical retailer will spend $3,050 on soap and related goods from Caprini in a year--ordering goods where Caprini earns an average 33% contribution margin as percent of revenue. Caprini sees a 84% retention rate for its retailer customers in this region, and maintains a corporate discount rate of 12% nationwide. Caprini currently serves 77 independent retailers in the state. Calculate Caprini's CUSTOMER LIFETIME VALUE for one of these independent retailer customer in California. (Rounding: whole dollar.)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Strategic Management From Theory To Practice

Authors: Allen C. Amason

1st Edition

0415871697, 978-0415871693

More Books

Students also viewed these General Management questions

Question

What is a floating-rate bond?

Answered: 1 week ago