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London based marketing consultancy firm Perthian offers annual consumer insight analysis to its clients. Its primary clients are supermarkets, clothing stores and electronics retailers. The

London based marketing consultancy firm Perthian offers annual consumer insight analysis to its clients. Its primary clients are supermarkets, clothing stores and electronics retailers. The following table provides the number of customers, expenses per client, service fee per client, and retention rate for each of the three sectors. The company applies a discount rate of 15% and has a 3-year planning horizon.

Sector

No. of clients

Avg. Annual expenses

per client

Service fee per client

Retention rate

Supermarkets

50

$150,000

$250,000

90%

Clothing

60

$200,000

$250,000

95%

Electronics

55

$210,000

$250,000

100%

  1. Calculate the CLV for Perthian clients in each of the three sectors, over the planning horizon (3 years).
  2. Suppose if Perthian wants to acquire new customers, which sector should it target and why?

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