Will the move to a corporate improve customer lifetime value? Use the photos to determine the the new brand strategy on customer lifetime value & determine if it will improve lifetime value. . Also use the increase in CLV to estimate the additional sales to be targeted (see lower left of the spreadsheet). Please explain (a) the relative influence of the factors affecting CLV & the possible reasons for the decline in customer acquisition cost.

Inputs Sourcce Without Rosewood Branding (2003) growing at Total Number of Unique Guests Average Daily Spend Number of Days Average Guest Stays per Stay Average Gross Margin per Room Average Number of Visits per Year per Guest Average Marketing Expense per Guest (system-wide) Average New Guest Acquisition Expense (system-wide) Total Number of Repeat Guests of which: Total Number of Multi-property Stay Guests Additional Costs Required per annum Discount Rate Average Guest Retention Rate 115,000 $750.00 2.0 32% 12 $130.00 $150.00 19.169 5,750 With Rosewood Corporate Branding 115,000 $750.00 2.0 32% 1.3 to be calc $125.00 24,919 to be calc to be calc 8% to be calc Exhibit 8 6% Exhibit 8 Exhibit 8 Exhibit 8 Exhibit 8 3% Exhibit 8 Exhibit 80 growing at Page 5 Exhibit 8 8% 16.67% 2003 2005 2009 2004 2.0 2.0 2006 2.0 2007 2.0 20 CLTV Calculation With No Changes to Brand Strategy Year Number of Nights per Stay Number of Stays per guest assuming they are retained) Revenue Per Night Revenue per Customer Gross Profit per Customer 12 1.2 1.2 1.2 2008 2.0 1.2 $1,003.67 $2,408.81 $770.82 1.2 $842.70 $2,022.48 $647.19 $795.00 $1,908.00 $610.56 $893.26 $2,143.83 $686.03 $946.86 $2,272.46 $727.19 $1,063.89 $2,553.33 $817.07 ($150.00) Less Cost to Acquire Customer Less Annual Marketing Cost per Customer Cash Flow from Customer if Retained ($133.90) $476.66 ($137.92) $509.28 ($142.05) $543.97 ($146.32) $580.87 ($150.71) $620.11 ($155.23) $661.84 ($150.00) Probability of Being Retained Expected Cash Flow from Customer 1.00 ($150.00) 1.00 $476.66 0.17 $84.90 0.03 $15.12 0.00 $2.69 0.00 0.48 0.00 $0.09 Discount Factor 1.000 1.080 1.166 1.260 1.360 1.469 1.587 $441.35 $72.78 $12.00 $1.98 $0.33 $0.05 NPV of Expected Cash Flow from Customer Total NPV of CLTV ($150.00) $378.49 CLTV Calculation With New Brand Strategy Year 2003 2004 2.0 2005 2.0 2006 2.0 2007 2.0 2008 2.0 2009 2.0 to be calc: $795.00 #VALUE! $661.44 $842.70 #VALUE! $701.13 $893.26 #VALUE! $743.19 $946.86 #VALUE! $787.79 $1,003.67 #VALUE! $835.05 $1,063.89 #VALUE! $885.16 Number of Nights per Stay Number of Stays per guest (assuming they are retained) Revenue Per Night Revenue per Customer Gross Profit per Customer Less Cost to Acquire Customer Less Annual Marketing Cost per Customer Less Additional Marketing Cost per Customer Less data management and analytics fee per customer Cash Flow from Customer if Retained ($125.00) calc calc ($125.00) Probability of Being Retained 1.00 1.00 0.22 0.05 0.01 0.00 0.00 Cash Flow from Customer if Retained ($125.00) 1.00 Probability of Being Retained Expected Cash Flow from Customer 1.00 0.22 ($125.00)' #VALUE! ' #VALUE! 0.05 #VALUE! 0.01 #VALUE! 0.00 #VALUE! 0.00 #VALUE! Discount Factor 1.000 1.080 1.166 1.260 1.360 1.469 1.587 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! NPV of Expected Cash Flow from Customer Total NPV of CLTV ($125.00) #VALUE! Increase in CLTV per customer of new Marketing Plan Multiplied by #of Customers to obtain increase in profit of Rosewood from new brand sto Divided by 32% gross margin to obtain increase in Revenue of Rosewood from new bran $1 million growing at 3% per year allocated to 115,000 guests Each custmer costs a $9 data managemt fee increasing and 4% per year "Management later realized that customer acquisition would actually be $125 instead of $150 Inputs Sourcce Without Rosewood Branding (2003) growing at Total Number of Unique Guests Average Daily Spend Number of Days Average Guest Stays per Stay Average Gross Margin per Room Average Number of Visits per Year per Guest Average Marketing Expense per Guest (system-wide) Average New Guest Acquisition Expense (system-wide) Total Number of Repeat Guests of which: Total Number of Multi-property Stay Guests Additional Costs Required per annum Discount Rate Average Guest Retention Rate 115,000 $750.00 2.0 32% 12 $130.00 $150.00 19.169 5,750 With Rosewood Corporate Branding 115,000 $750.00 2.0 32% 1.3 to be calc $125.00 24,919 to be calc to be calc 8% to be calc Exhibit 8 6% Exhibit 8 Exhibit 8 Exhibit 8 Exhibit 8 3% Exhibit 8 Exhibit 80 growing at Page 5 Exhibit 8 8% 16.67% 2003 2005 2009 2004 2.0 2.0 2006 2.0 2007 2.0 20 CLTV Calculation With No Changes to Brand Strategy Year Number of Nights per Stay Number of Stays per guest assuming they are retained) Revenue Per Night Revenue per Customer Gross Profit per Customer 12 1.2 1.2 1.2 2008 2.0 1.2 $1,003.67 $2,408.81 $770.82 1.2 $842.70 $2,022.48 $647.19 $795.00 $1,908.00 $610.56 $893.26 $2,143.83 $686.03 $946.86 $2,272.46 $727.19 $1,063.89 $2,553.33 $817.07 ($150.00) Less Cost to Acquire Customer Less Annual Marketing Cost per Customer Cash Flow from Customer if Retained ($133.90) $476.66 ($137.92) $509.28 ($142.05) $543.97 ($146.32) $580.87 ($150.71) $620.11 ($155.23) $661.84 ($150.00) Probability of Being Retained Expected Cash Flow from Customer 1.00 ($150.00) 1.00 $476.66 0.17 $84.90 0.03 $15.12 0.00 $2.69 0.00 0.48 0.00 $0.09 Discount Factor 1.000 1.080 1.166 1.260 1.360 1.469 1.587 $441.35 $72.78 $12.00 $1.98 $0.33 $0.05 NPV of Expected Cash Flow from Customer Total NPV of CLTV ($150.00) $378.49 CLTV Calculation With New Brand Strategy Year 2003 2004 2.0 2005 2.0 2006 2.0 2007 2.0 2008 2.0 2009 2.0 to be calc: $795.00 #VALUE! $661.44 $842.70 #VALUE! $701.13 $893.26 #VALUE! $743.19 $946.86 #VALUE! $787.79 $1,003.67 #VALUE! $835.05 $1,063.89 #VALUE! $885.16 Number of Nights per Stay Number of Stays per guest (assuming they are retained) Revenue Per Night Revenue per Customer Gross Profit per Customer Less Cost to Acquire Customer Less Annual Marketing Cost per Customer Less Additional Marketing Cost per Customer Less data management and analytics fee per customer Cash Flow from Customer if Retained ($125.00) calc calc ($125.00) Probability of Being Retained 1.00 1.00 0.22 0.05 0.01 0.00 0.00 Cash Flow from Customer if Retained ($125.00) 1.00 Probability of Being Retained Expected Cash Flow from Customer 1.00 0.22 ($125.00)' #VALUE! ' #VALUE! 0.05 #VALUE! 0.01 #VALUE! 0.00 #VALUE! 0.00 #VALUE! Discount Factor 1.000 1.080 1.166 1.260 1.360 1.469 1.587 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! NPV of Expected Cash Flow from Customer Total NPV of CLTV ($125.00) #VALUE! Increase in CLTV per customer of new Marketing Plan Multiplied by #of Customers to obtain increase in profit of Rosewood from new brand sto Divided by 32% gross margin to obtain increase in Revenue of Rosewood from new bran $1 million growing at 3% per year allocated to 115,000 guests Each custmer costs a $9 data managemt fee increasing and 4% per year "Management later realized that customer acquisition would actually be $125 instead of $150