Customer Focus, Customer Performance and Profit Impact : Question 3

1.3 Lifetime Value of a Customer (Figure 1-11)

Analysis	Scale

Customer Retention	80% %
Customer Life
Year	0	1	2	3	4	5	6	7	8	9	10
Customer Margin	$0 $	$30 $	$42 $	$44 $	$49 $	$55 $	$0 $	$0 $	$0 $	$0 $	$0 $
Acquisistion Cost	-$51 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $
Retention Cost	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $
Net Profit
Discount Rate	10% %
Present Value Multiplier
Net Present Value
Lifetime Value of Customer

Starting Data	Scale

Customer Retention	80% %
Customer Life
Year	0	1	2	3	4	5	6	7	8	9	10
Customer Margin	$0 $	$30 $	$42 $	$44 $	$49 $	$55 $	$0 $	$0 $	$0 $	$0 $	$0 $
Acquisistion Cost	-$51 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $
Retention Cost	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $	$0 $
Net Profit
Discount Rate	10% %
Present Value Multiplier
Net Present Value
Lifetime Value of Customer

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