Over the course of a customer’s lifetime of reading a weekly magazine priced at $4 per issue, what is the value of the magazine? Assume a customer acquisition cost of $12, a retention cost of $0, printing and distribution costs of $1, an annual retention rate of 77% and an annual discount rate of 2.6%. Assume that price and non-marketing variable costs remain constant over the customer’s lifetime of reading the magazine.
Over the course of a customer’s lifetime of reading a weekly magazine priced at $4 per issue, what is the value of the magazine? Assume a customer acquisition cost of $12, a retention cost of $0, printing and distribution costs of $1, an annual retention rate of 77% and an annual discount rate of 2.6%. Assume that price and non-marketing variable costs remain constant over the customer’s lifetime of reading the magazine.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Over the course of a customer’s lifetime of reading a weekly magazine priced at $4 per issue, what is the value of the magazine? Assume a customer acquisition cost of $12, a retention cost of $0, printing and distribution costs of $1, an annual retention rate of 77% and an annual discount rate of 2.6%. Assume that price and non-marketing variable costs remain constant over the customer’s lifetime of reading the magazine.
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