Marketing

posted by .

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?

  • Marketing -

    alkmf

  • Marketing -

    fewefwe

  • Marketing -

    $67.2639

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Algebra

    Use the five steps for problem sovling. Company A charges $25 per month plus $0.22 per minute for cell phone service. Company B charges $35 per month plus $0.12 per minute. How many minutes of usage is needed in one month to make Company …
  2. Stats

    Consider the Avionic Manufacturing Company that wishes to meet a demand of 10 units per month by purchasing the items from a vendor with a lead time of three-quarters of a month. The item cost is $2.50 per unit, replenishment cost …
  3. math

    A cell phone company charges each customer a base rate of $15.00 per month for its services. The company also charges each customer $0.02 per minute used. Which algebraic expression represents each customer's monthly charge for m minutes?
  4. Math

    I am having trouble on this question. a cable TV company charges $24.95 per month for basic service and $6.95 per month for each premium channel. a customer's bill for one month is $45.80. write and solve an equation to find the number …
  5. Math

    Hey guys I need some help with this question PLZ: A telecommunications company offers a rental deal which costs $30 per month plus 50c per call. a) Find the total cost (T1) for making x calls in a given month b)Find the total cost …
  6. Algebra

    You are choosing between two different internet providers. Company A charges $75 for installation and $42 per month. Company B charges $30 per month for installation and $45 per month. After how many months will the total costs for …
  7. Algebra

    A cell phone company charges each customer a base rate of $15.00 per month for its services. The company also charges each customer $0.02 per minute used Which algebraic expression represents each customer's monthly charge for m minutes?
  8. computer science

    An Internet service provider has three different subscription packages for its customers: Package A: For $9.95 per month 10 hours of access are provided. Additional hours are $2.00 per hour. Package B: For $13.95 per month 20 hours …
  9. computer science

    Internet Service Provider An Internet service provider has three different subscription packages for its customers: Package A: For $9.95 per month 10 hours of access are provided. Additional hours are $2.00 per hour. Package B: For …
  10. Math

    Each month, Allen pays a total of $150 for both cable TV and internet service. If he were to switch to a rival service provider, he would pay $70 less per month for cable TV service and twice as much per month for internet service. …

More Similar Questions