CLV Assignment (50 points) Due: Monday, June 8, 2020 Calculate Cumulative CLV for following: Question 1 (a, b, c): Government (a) Educational Institution (b) Small Business (c) Cost of solicitation...

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CLV Assignment (50 points) Due: Monday, June 8, 2020 Calculate Cumulative CLV for following: Question 1 (a, b, c):   Government (a) Educational Institution (b) Small Business (c) Cost of solicitation $1,000 $500 $500 Response rate 5% 10% 20% Time Horizon (Years) 4 5 5 Average spend/customer/per order 1000 500 200 Number of Orders (Yearly) 25 30 50 Margin 60% 50% 50% Ongoing Marketing costs $500 $200 $200 Retention rate (r) 70% 60% 50% Time: Discount rate (d) 10% 10% 10% Based on cumulative CLV, which segment should be targeted? Question 2:   Year 1 Year 2 Year 3 Cost of solicitation 1000 Response rate 5% Avg. Number of purchases per year 10 10 12 Avg. purchase/order size (per order) 1000 700 500 Margin 50% 50% 50% Ongoing Marketing costs $500 $300 $250 Retention rate (r) 70% 70% 70% Time: Discount rate (d) 10% 10% 10% Question 3:   Year 1 Year 2 Year 3 Cost of solicitation $50 Response rate 10% Avg. Number of purchases per year 25 30 30 Avg. purchase/order size (per order) 50 30 25 Margin 50% 50% 50% Ongoing Marketing costs $50 $30 $25 Retention rate (r) 90% 90% 90% Time: Discount rate (d) 10% 10% 10% CLV Assignment (50 points) Due: Monday, June 8, 2020 Year 0 Calculate Cumulative CLV for following: Question 1 (a, b, c):   Government (a) Educational Institution (b) Small Business (c) Cost of solicitation $1,000 $500 $500 Response rate 5% 10% 20% Time Horizon (Years) 4 5 5 Average spend/customer/per order 1000 500 200 Number of Orders (Yearly) 25 30 50 Margin 60% 50% 50% Ongoing Marketing costs $500 $200 $200 Retention rate (r) 70% 60% 50% Time: Discount rate (d) 10% 10% 10% Based on cumulative CLV, which segment should be targeted? Question 2:   Year 1 Year 2 Year 3 Cost of solicitation 1000 Response rate 5% Avg. Number of purchases per year 10 10 12 Avg. purchase/order size (per order) 1000 700 500 Margin 50% 50% 50% Ongoing Marketing costs $500 $300 $250 Retention rate (r) 70% 70% 70% Time: Discount rate (d) 10% 10% 10% Question 3:   Year 1 Year 2 Year 3 Cost of solicitation $50 Response rate 10% Avg. Number of purchases per year 25 30 30 Avg. purchase/order size (per order) 50 30 25 Margin 50% 50% 50% Ongoing Marketing costs $50 $30 $25 Retention rate (r) 90% 90% 90% Time: Discount rate (d) 10% 10% 10%