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Q2: Assume that Shannons decides to move forward with its loyalty/rewards program. Estimates for the cost per customer are $2.7 per month. Average customer margins,
Q2: Assume that Shannons decides to move forward with its loyalty/rewards program. Estimates for the cost per customer are $2.7 per month. Average customer margins, before subtracting off the cost of the loyalty/rewards program, are expected to be $36 per customer per month with a boost in retention to 82% per month. What is the resulting CLV if the annual interest rate for discounting cash flows remains the same as in Q1? Compute your answer to the nearest dollar.
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