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