Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Let's assume average lifetime of the customers is 15 years and estimated average revenue from each customer at year1 is $450. It is expected that

Let's assume average lifetime of the customers is 15 years and estimated average revenue from each customer at year1 is $450. It is expected that each year revenue contribution from each customer will grow by 5%. Churn probability of each customers (across all the years) are given in the following table. Customer ID Churn probability 1 30% 2 25% 3 32% 4 25% 5 20% Average Customer acquisition cost was $150 & Current discount rate (cost of money) is 6%. What will be the overall lifetime value generated by this group of customers? ____(Answer in integers, not decimals)

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_2

Step: 3

blur-text-image_3

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

Essentials of Marketing Research

Authors: Barry J. Babin, William G. Zikmund

6th edition

9781305688094, 1305263472, 1305688090, 978-1305263475

More Books

Students also viewed these Marketing questions

Question

What is management?

Answered: 1 week ago