1. What is the value of a loyal customer (VLC) if the customer retention rate is 50 percent? Round your answer to the nearest cent. $ fill in the blank 2 2. What is the value of a loyal customer (VLC) if the customer retention rate increases to 75 percent? Round your answer to the nearest cent. $ fill in the blank 3 3. What is a 1 percent change in market share worth to the manufacturer if it represents 100,000 customers? Round your answers to the nearest dollar. 50 percent customer retention rate case: $ fill in the blank 4 75 percent customer retention rate case: $ fill in the blank 5 4. What do you conclude? If customer retention can be increased from 50 to 75 percent through better value chain performance, the economic payoff is
1. What is the value of a loyal customer (VLC) if the customer retention rate is 50 percent? Round your answer to the nearest cent. $ fill in the blank 2 2. What is the value of a loyal customer (VLC) if the customer retention rate increases to 75 percent? Round your answer to the nearest cent. $ fill in the blank 3 3. What is a 1 percent change in market share worth to the manufacturer if it represents 100,000 customers? Round your answers to the nearest dollar. 50 percent customer retention rate case: $ fill in the blank 4 75 percent customer retention rate case: $ fill in the blank 5 4. What do you conclude? If customer retention can be increased from 50 to 75 percent through better value chain performance, the economic payoff is
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
1. What is the value of a loyal customer (VLC) if the customer retention rate is 50 percent? Round your answer to the nearest cent.
$ fill in the blank 2
2. What is the value of a loyal customer (VLC) if the customer retention rate increases to 75 percent? Round your answer to the nearest cent.
$ fill in the blank 3
3. What is a 1 percent change in market share worth to the manufacturer if it represents 100,000 customers? Round your answers to the nearest dollar.
50 percent customer retention rate case: $ fill in the blank 4
75 percent customer retention rate case: $ fill in the blank 5
4. What do you conclude?
If customer retention can be increased from 50 to 75 percent through better value chain performance, the economic payoff is
Transcribed Image Text:1. What is the value of a loyal customer (VLC) if the customer retention rate is 50 percent? Round your answer to the nearest cent.
$4
200
2. What is the value of a loyal customer (VLC) if the customer retention rate increases to 75 percent? Round your answer to the nearest cent.
$
3.00 X
3. What is a 1 percent change in market share worth to the manufacturer if it represents 100,000 customers? Round your answers to the nearest dollar.
50 percent customer retention rate case: $
70
75 percent customer retention rate case: $
45
4. What do you conclude?
If customer retention can be increased from 50 to 75 percent through better value chain performance, the economic payoff is doubled
Transcribed Image Text:A
C
D
1
Value of a Loyal Customer
2
Revenue per unit
Percent contribution margin to profit and overhead
Repurchase frequency (purchases/year)
Customer retention rate
3
$100.00
4
50%
5
0.5
0.5
7
Number of customers representing 1 percent market share
100,000
8
Formulas
9
Buyer's life cycle
#N/A
10
11
12
13
14
VLC
#N/A
Value of a 1 percent change in market share
#N/A
Customer retention rate
0.75
15
16
17
18
19
Buyer's life cycle
#N/A
VLC
#N/A
Value of a 1 percent change in market share
#N/A
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