Homework Help: Marketing

Posted by Anonymous on Saturday, January 28, 2012 at 2:23pm.

Net-4-You is an internet service provider that charges its 1 million customers $19.95 per month for its service. The company's variable cost are $0.50 per customer per month. In addition, the company spends $0.50 per month per customer, or $6 million annually, on a customer loyalty program designed to retain customers. As a result, the company's monthly customer retention rate was 78.8 percent. Net-4-You has a monthly discount rate of 1 percent.

a.) What is the customer lifetime value?

b.) Suppose the company wanted to increase its customers' monthly retention rate and decided to spend an additional $0.20 per month per customer to upgrade its loyalty program benefits. By how much must Net-4-You increase it's monthly customer retention rate so as not to reduce customer lifetime value resulting from a lower customer margin?

No one has answered this question yet.

Answer this Question

Related Questions

Math - A cable TV company charges $24.95 per month for basic service and $6.95 ...
MARKETING - 8. Net-4-You is an Internet Service Provider that charges its 1 ...
Managerial Accounting - Flexible budget planning Sam Yu, the president of ...
algebra - your internet provider offers two different plans. one plan costs $0....
Algebra - Use the five steps for problem sovling. Company A charges $25 per ...
Marketing Principles - Motivating and Leading The following are the four P's...
algebra1 - an internet serive provider charges $9.95/month for the first 20 ...
Math - One shuttle service charges $10 for pickup and $0.10 per mile. The other ...
math - don't know where to start or end! charges $20 for a phone and $30/...
marketing - Select a product or service you would like to introduce to the ...

For Further Reading

First Name:
School Subject:
Answer: