Question: According to a study by Bain & Company, increasing customer retention rates by just 5 % increases profits by 2 5 % to 9 5

"According to a study by Bain & Company, increasing customer retention rates by just 5% increases profits by 25% to 95%. Whats more, 82% of companies agree that retention is cheaper to execute than acquisition, according to an e-Consultancy report released last month."
For a firm with a recurring gross margin per customer of $50 per month and a current retention rate of 70% per year, by what percentage does gross margin increase for a 5% increase in customer retention? You may assume a 7% discount rate.

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