Question

The House of Weibracht (HOW) designs collectible beer steins under contracts with some of the nation’s largest breweries. HOW has these steins made overseas and imports them for sale to both beer distributors and individual consumers. The sales manager of HOW is typically able to negotiate a contract for a series of four annual steins—e.g., four wildlife steins, four train steins, four fisherman steins, etc.—with the breweries. A collectible stein retails for $37, and HOW earns a profit margin of 39% on the steins it sells to individual customers. 88% of the individual customers who purchase the first of the series buy the remaining three steins of the set in the following years. The upcoming series will feature the castles of Ireland. What is the estimated CLV of a customer who purchases the first of the Irish Castle stein series?

Please post the Excel formula

Answer 1

	Particulars	Amount
a.	Sales Price for 1 Stein	$          37
b.	Set Quantity	4
c.	Revenue from one set of Stein (a*b)	$        148
d.	No of Stein set expected to be sold in next years	3
e.	Expected Revenue @100% conversion (c*d)	$        444
f.	Expected Converson Rate	88%
g.	Expected Customer Lifetime Revenue ( e*f)	$        391

The question does not provide for number of customers. If provided answer can be provided in more detailed manner.

CLV	Annual Revenue * Average Customer Lifespan - Cost of Acquiring Customer