Question

A local dental practice decides to run a Groupon campaign. The campaign offered $360 worth of dental services (such as teeth whitening) for $140. For the total campaign, 255 coupons were sold. We estimate that 85% of the coupons will be redeemed, that 35% of the coupons will be redeemed by existing customers and that, on average, Groupon customers purchased 1.5 coupons. Let’s assume that 30% of new customers come back after the Groupon coupon visit. The dental practice estimates its cost of goods sold to be 50%. Finally, the bill for the average Groupon customer was $395. The dental practice negotiated a 50/50 split with Groupon. Calculate the cost per new customer. show work!

Answer 1