Question
Question One - Use the Consumer Figures Case Study numbers (in the Word doc) and determine from an overall profitability standpoint, which is better: The
Question One - Use the Consumer Figures Case Study numbers (in the Word doc) and determine from an overall profitability standpoint, which is better:
- The starting numbers in the case
- OR
- An offer of 2 Honeybell Cheesecakes for $79.00 with the following changes
- 1.05% Average Response, 50% COGS, $8.00 Fulfillment, and Response per Year of 16%, 13%, and 11% (No other changes)
- OR
- An offer of 2 Honeybell Cheesecakes for $70.00 with the following changes
- 1.15% Average Response, 55% COGS, $8.00 Fulfillment, and Response per Year of 17%, 14%, and 12% (No other changes)
Lifetime Value Category Entry Column Results Column Cost to reach a prospect $0.65 Average response 1.10% Advertising Cost to aquire a customer $59.09 Average Initial Order $65.00 Average Initial COGS% 50.00% Initial Fulfillment Cost $5.00 Profiton initial sale $27.50 Initial investment per customer 31.59 Cost to reach a customer $0.55 Number of customer contacts/year 8.0 Annual marketing cost $4.40 Response Rate Per Contact Per Year Year One 15.00% 1.2 Year Two 10.00% 0.8 Year Three 7.00% 0.56 Average Repeat Order $60.00 Avg Repeat COGS% 50% Repeat Order Fulfillment Cost $4.00 Profit per Customer Per Year Year One $26.80 Year Two $16.40 Year Three $10.16 Time Value of Money and Risk Factor Discount 0.00% Future Value of Profit per Customer Per Year Year One $26.80 Year Two $16.40 Year Three $10.16 3 Year Lifetime Value $21.77
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Contemporary Business Mathematics with Canadian Applications
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
11th edition
134141083, 978-0134141084
