Question: A cable company spends, on average, $ 600 to acquire a customer. Annual maintenance costs per customer are $ 45. Annual record-keeping and billing costs
A cable company spends, on average, $ 600 to acquire a customer. Annual maintenance costs per customer are $ 45. Annual record-keeping and billing costs are $ 30 per customer. While the price of the basic service to customers is $ 30/month, 40% of customers buys the premium package at $ 50/month and 10% buy the superpremium package at $ 80/month. Over time, 80% of all customers remains with the company in the long run. The firm uses a discount rate of 8%. What is the average CLV for all customers?
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