1. Calculate the customer lifetime value (using the formula) for the following three scenarios: Acquisition cost = $1,000, retention rate = 60%, annual profit = $500 Acquisition cost = $10,000, retention rate = 75%, annual profit = $2,500 Acquisition cost = $100, retention rate = 50%, annual profit = $100 2. Which scenario generates the most customer lifetime value? Which is the least profitable scenario? 3. What elements appear to be the most significant in the calculation - that is, if you were a marketer facing these scenarios, which elements would you focus upon? 4. This is the simple calculation for customer lifetime value. What other information you think needs to be incorporated? CLV = 1 (1 customer retention rate) * (annual customer profit) - (cost of acquisition)