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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