A cable company spends on average $600 to acquire a customer Over time, 80 of customers remain with the company from one year to the next The discount rate is 12 Costs to serve each customer are annual maintenance costs $45 annual record keeping and billing costs $30 Revenue is as follows Price per Month of Customers Basic Service $30 50 Premium Service $50 40 Super Premium Service $80 10 What is the annual profit margin for an average customer What is the CLV for an average customer What is the CLV for a Super Premium customer

Question: A cable company spends on average $600 to acquire a customer. Over time, 80% of customers remain with the company from one year to the

A cable company spends on average $600 to acquire a customer. Over time, 80% of customers remain with the company from one year to the next. The discount rate is 12%. Costs to serve each customer are: annual maintenance costs - $45; annual record-keeping and billing costs - $30. Revenue is as follows:

	Price per Month	% of Customers
Basic Service	$30	50%
Premium Service	$50	40%
Super Premium Service	$80	10%

What is the annual profit margin for an average customer?
What is the CLV for an average customer?
What is the CLV for a Super Premium customer?

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