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Name: Date: Please answer the following questions based on this scenario: A cable company spends on average $600 to acquire a customer. Annual maintenance costs
Name: Date: Please answer the following questions based on this scenario: A cable company spends on average $600 to acquire a customer. Annual maintenance costs per customer $45; record-keeping and billing costs $30 per customer per annum. Price of a basic service package - $30 per month. Typically, 40 percent of customers buy a premium package - $50 per month; 10 percent buy the superpremium package --$80 per month. The average discount rate provided to each customer is 12%. Over time, 80 percent of customers remain with the company from one year to the next. 1. What is the average CLV for all customers? 2. What is the true average CLV for all customers? 3. What is the true average CLV of a superpremium customer
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