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4. Customer Relationship Management: A. Compute the CLV for the three behavioral segments based on assumptions below. If you need to make any additional assumptions, please make them and state them. Spend/Yr Transactors $16,000 Revolvers $16,000 Dormants Just enough to earn sign on bonus Balance carried $0 50% of spend/yr $0 Interest Rate 21% 21% 21% 2nd year Renewal 80% 50% 20% at $450 fee Renewal in Yrs 90% 80% 50% 3-5 Interchange Fee 1.5% 1.5% Acquisition $350 $350 1.5% $350 Expense Bonus Points 100K for first year +1 point/spend Bonus Points 50% 100K for first year +1 point/spend 80% 100K for first year +1 point/spend 100% Redeemed Redeemed Bonus 1c per point 1c per point 1c per point Point Expense Customer $20 $20 $20 maintenance cost/Year

4. Customer Relationship Management: A. Compute the CLV for the three behavioral segments based on assumptions below. If you need to make any additional assumptions, please make them and state them. Spend/Yr Transactors $16,000 Revolvers $16,000 Dormants Just enough to earn sign on bonus Balance carried $0 50% of spend/yr $0 Interest Rate 21% 21% 21% 2nd year Renewal 80% 50% 20% at $450 fee Renewal in Yrs 90% 80% 50% 3-5 Interchange Fee 1.5% 1.5% Acquisition $350 $350 1.5% $350 Expense Bonus Points 100K for first year +1 point/spend Bonus Points 50% 100K for first year +1 point/spend 80% 100K for first year +1 point/spend 100% Redeemed Redeemed Bonus 1c per point 1c per point 1c per point Point Expense Customer $20 $20 $20 maintenance cost/Year

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Please calculate the CLV for the three behavioral segments based on attached image assumptions.  Please feel free to make any additional assumptions and state them.

4. Customer Relationship Management: A. Compute the CLV for the three behavioral segments based on assumptions below. If you need to make any additional assumptions, please make them and state them. Spend/Yr Transactors $16,000 Revolvers $16,000 Dormants Just enough to earn sign on bonus Balance carried $0 50% of spend/yr $0 Interest Rate 21% 21% 21% 2nd year Renewal 80% 50% 20% at $450 fee Renewal in Yrs 90% 80% 50% 3-5 Interchange Fee 1.5% 1.5% Acquisition $350 $350 1.5% $350 Expense Bonus Points 100K for first year +1 point/spend Bonus Points 50% 100K for first year +1 point/spend 80% 100K for first year +1 point/spend 100% Redeemed Redeemed Bonus 1c per point 1c per point 1c per point Point Expense Customer $20 $20 $20 maintenance cost/Year
Transcribed Image Text:4. Customer Relationship Management: A. Compute the CLV for the three behavioral segments based on assumptions below. If you need to make any additional assumptions, please make them and state them. Spend/Yr Transactors $16,000 Revolvers $16,000 Dormants Just enough to earn sign on bonus Balance carried $0 50% of spend/yr $0 Interest Rate 21% 21% 21% 2nd year Renewal 80% 50% 20% at $450 fee Renewal in Yrs 90% 80% 50% 3-5 Interchange Fee 1.5% 1.5% Acquisition $350 $350 1.5% $350 Expense Bonus Points 100K for first year +1 point/spend Bonus Points 50% 100K for first year +1 point/spend 80% 100K for first year +1 point/spend 100% Redeemed Redeemed Bonus 1c per point 1c per point 1c per point Point Expense Customer $20 $20 $20 maintenance cost/Year
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