There is a company running a subscription-based business. A marketing manager of this company found that a customer of the company is expected to, on average, generate $200 of gross contribution per year and the retention rate of the customer is, on average, 85% per year. With 5% of annual discount factor and $500 of acquisition costs per customer, a customer's LTV for the entire life-time is about A $230 B $350 C $500 D $450 E $850
There is a company running a subscription-based business. A marketing manager of this company found that a customer of the company is expected to, on average, generate $200 of gross contribution per year and the retention rate of the customer is, on average, 85% per year. With 5% of annual discount factor and $500 of acquisition costs per customer, a customer's LTV for the entire life-time is about A $230 B $350 C $500 D $450 E $850
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter13: Regression And Forecasting Models
Section: Chapter Questions
Problem 40P: The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels....
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There is a company running a subscription-based business. A marketing manager of this company found that a customer of the company is expected to, on average, generate $200 of gross contribution per year and the retention rate of the customer is, on average, 85% per year. With 5% of annual discount factor and $500 of acquisition costs per customer, a customer's LTV for the entire life-time is about
A $230
B $350
C $500
D $450
E $850
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