Great Gator Gifts (GGG) launched a Touchdown Club, where Gator fans can create a wish list?? of Gator items.? Every year, at the beginning of football season, GGG sends a link to the spou
Great Gator Gifts (GGG) launched a Touchdown Club, where Gator fans can create a “wish list” of Gator items. Every year, at the beginning of football season, GGG sends a link to the spouse of each member of the Touchdown Club with a reminder to kick the season off with a special Gator gift. GGG attracted new customers at a cost of $25.00 each and tracked their purchases over a 4-year period. The average annual purchase was $500.00, with a gross margin of 60% and annual per capita marketing expense of $50.00. GGG uses a discount rate of 8%, and the observed annual retention rate of Touchdown Club members was 50%. What was GGG’s 4-year CLV?
https://warrington.video.ufl.edu/Mediasite/Play/0823104c2dc74f8cac525e9872a3bfea1d
https://warrington.video.ufl.edu/Mediasite/Play/ad0ded7acb0e456aa6d1f07e846a27bb1d
Please complete and correct if necessary the Excel file.
Sheet1
| Data Given | |||||||||
| New Customers | ?? | ||||||||
| Acquisition Cost/customer | $25 | ||||||||
| Revenue/customer | $500 | ||||||||
| Gross Margin % | 60% | ||||||||
| Mktg Exp Per Capita | $50 | ||||||||
| Discount Rate | 8% | ||||||||
| Retention Rate | 50% | ||||||||
| Time | 4 Years | ||||||||
| Year | |||||||||
| 1 | 2 | 3 | 4 | Total | |||||
| Revenue | 500 | 500 | 500 | 500 | |||||
| COGS | 200 | 200 | 200 | 200 | |||||
| Gross Maring % | 60% | 60% | 60% | 60% | |||||
| Contribution | 300 | 300 | 300 | 300 | |||||
| Marketing Expense | 50 | 50 | 50 | 50 | |||||
| Cash Flow | 250 | 250 | 250 | 250 | |||||
| Discount Rate | |||||||||
| Retention Rate (zero @ Y1 | |||||||||
| Expected NPV | Cumulative NPV | ||||||||
| 25 | Acquisition Cost | ||||||||
| CLV |
Computational Formula C = Cash Flow d = Discount rate t = Time period r = Retention probability A = Acquisition cost
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Great Gator Gifts (GGG) launched a Touchdown Club, where Gator fans can create a “wish list” of Gator items. Every year, at the beginning of football season, GGG sends a link to the spouse of each member of the Touchdown Club with a reminder to kick the season off with a special Gator gift. GGG attracted new customers at a cost of $25.00 each and tracked their purchases over a 4-year period. The average annual purchase was $500.00, with a gross margin of 60% and annual per capita marketing expense of $50.00. GGG uses a discount rate of 8%, and the observed annual retention rate of Touchdown Club members was 50%. What was GGG’s 4-year CLV?
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