Question

After returning home, you were interested in finding out your customer lifetime value so that you could develop promotional campaigns to improve your CLV. In order to calculate the CLV metric, a speaker at the marketing conference suggested that you use data from your company's books related to four variables. The first variable is average value of sales per year. Your books showed that on average, the average value of sales per year was $750. The second variable is average customer acquisition cost. It includes promotion expenses , sales expenses , and your costs of attracting new customers during the first year, and it was found to be $ 400. The third variable , average customer retention rate, consists of the percentage of customers that will most probably buy from your store next year , and it was found to be 70 percent . The fourth variable , customertretention cost , is the cost of keeping customers loyal to your business , and it was found to be $ 100 . Now that you have all the figures that you need , you take your notes out of your briefcase to check the formula that you learned at the marketing conference . The version of CLV they presented at the conference was : Customer lifetime value =[1/(1-A) Average customer retention rate )] X (Average value of sales per year ) - ( Average customer acquisition cos t + Ave Average customer retention cost ). Using the worksheet below , you will need to input the data and create the formula in the required cell . Replace the variables in the formula ith the annropriate cell .

Answer 1

Details derived from Records
Average value of sales per year	750
Average customer acquisition cost	400
Average customer retention rate	70%
Customer retention cost	100
Customer Lifetime Value	833.33