Question
Our study shows that one customer will have different transaction values in the next five years with Giant Tiger (See Table 6). The gross contribution
Our study shows that one customer will have different transaction values in the next five years with Giant Tiger (See Table 6). The gross contribution is 0.25 and discount rate is 0.01. Suppose current year is 2006. Please figure out the Lifetime Value (LTV) of this customer. Suppose we have total 2000 customers who will share the same purchase patterns as this customer in the next five years. How much is the customer equity?
Table 6. Future Transaction
Gross contribution | 0.25 | ||||
Discount rate | 0.01 | ||||
| 2007 | 2008 | 2009 | 2010 | 2011 |
$ Amount | 700 | 600 | 500 | 400 | 500 |
GC |
|
|
|
|
|
LTV |
|
|
|
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started