Question
Members of Goodlife Gym pay on average $30 once per month in the gym. Variable cost such as towels, soap and shampoo, and disinfectant associated
Members of Goodlife Gym pay on average $30 once per month in the gym. Variable cost such as towels, soap and shampoo, and disinfectant associated with each customer is $7 per month.
a) GoodLife's retention rate is 93%per year. What is the CLTV of a Goodlife's costumer if an annual rate of interest is 8%?(Hint: use the Traditional formula)
b) Find CLTVif a customer is expected to stay for 4 years. Use the Easy method.
c) Find the CLTV using the Simple formula if the retention rate is 93 %.(0.5 mark)
d) Find the CLTV using the DCF method over 4 years, at 11.25 % compounded semi annually.
e) Goodlife is planning to organize a dinner theatre for its customers, where it will spend $ 600 per customer; based on the CLTV computed using the four methods, what would you advise?
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