After you have calculated a $CLV$ for each type $of$ customer that NCA serves, Kari would like you consider the following questions and summarize your findings and recommendations $in$ the memo that you prepare:

$*$ What $is$ the value $ofan$ average $RBC,NSN,$ and $SFC$ customer? Which kind $of$ customer $do$ your analyses suggest $is$ the most valuable? Also, are the break$-$even points for these customers the same $ordo$ they vary?

$*$ Kari and her team are considering dropping the price $of$ its $NSN$ coaching program. The proposal $on$ the table $isto$ reduce the price $of$ this offering $by$ $$25to$ a new price $of$ $$475.$ The $HR-$related costs for this offering would remain the same but NCA predicts that the new lower price would boost the response rate $to3\mathrm{.}1\%$ and the retention rate $to53\%.$ Assuming that these forecasts are correct, should NCA implement this strategy?

$*$ Kari has also come $up$ with some fresh new ideas for how $to$ boost the profitability $of$ their $SFC$ coaching product. $In$ a nutshell, they have come $up$ with two different options. Kari describes both $of$ these options $to$ you $asa$ little out there$,$ and says that they only want $to$ mention these $to$ the NCA management team $if$ one $of$ them really has the potential $to$ boost the company$s$ profitability. For now, Kari says coyly, the specific $of$ these options will have $to$ stay $under$ wraps$.$ Assume that the associated costs for these options are identical and that the timing $of$ these costs $is$ also identical. Based solely $on$ your $CLV$ analyses, which option looks like the preferred choice? Under what assumptions would you recommend actually implementing this option? Here are the options $to$ consider:

Option $1$: Kari believes that this option would boost the $SFC$ response rate from $3\%to3\mathrm{.}5\%.$

Option $2$: Kari believes that this option would boost the $SFC$ retention rate from $56\%to61\%.$

$*$ Finally, based $on$ all $of$ the $CLV$ analyses you have conducted and the insights into customer profitability that you have obtained, what actions should NCA take $to$ improve its overall financial performance? Specifically, $do$ they need $to$ make any modifications $in$ their product lineup? $If$ they make these changes, what kind $of$ short$-$term and long$-$term effects will this have $on$ NCA$s$ business?General Context and Information About the Firm

The Situation. The German company Nomad Coaching Academy $is$ the leading provider $of$

online training and coaching services for location independent knowledge workers $(aka$ "digital

nomads"$).$ "Remote first" companies have existed since the early $2000s,$ but during the COVID

pandemic, the number $of$ employees that were working from home rose dramatically. $As$ digital

collaboration tools such $as$ Zoom and Slack became more widely adopted, $an$ increasing

number $of$ people, who were working from home realized that they might also have the freedom

$to$ work from another part $of$ the country $or$ even from another part $of$ the world. Thus, the

COVID crisis fueled a major shift $in$ the way work had been previously done and sparked a keen

interest $by$ many professionals $in$ working and traveling abroad $on$ their own terms. Today, the

number $of$ digital nomads continues $to$ grow and nomads are working $as$ freelancers,

employees, and entrepreneurs across a diverse set $of$ fields such $as$ software development,

graphic design, social media management, and $UX$ design.

The Company: After current CEO Kari Lang founded the company $in2017,$ Nomad Coaching

Academy $(NCA)$ grew rapidly $to$ become the leading provider $of$ coaching services for digital

nomad entrepeneurs, who have founded their own remote online firms. Currently, NCA has

three different live $1-on-1$ coaching offerings that target individuals that are $at$ different stages $of$

their digital nomad entrepreneurial journeys. $(Table2$ provides historical financial data relating

$to$ these three products.$)$ The services that NCA provides include:

New Remote Boss $(NRB)$ coaching $-$ The $NRB$ program $is$ designed $to$ provide support and

guidance for new, nomadic entrepreneurs who have recently launched their own online

businesses. This $1-on-1$ live coaching program $is$ delivered $100\%$ online and enables clients $to$

connect with a career coach, who can provide them with the kind $of$ advice that new, nomadic

business owners often seek such $as$ defining the scope $of$ their offering, "niching down" $to$

identify the most attractive segment$(s)to$ target, and building networks $to$ make $it$ easier for

them $to$ identify top talent and attract potential clients. $NRB$ clients meet with their coach about

every two weeks and before they start the program, they must purchase a package $of241-$hour

coaching sessions. Each $of$ these coaching sessions costs the customer $$350$ and this relatively

high price point means that about $20\%of$ its customers are nomads, who created a remote,

online company $in$ the last six months, $30\%$ have been running their company for between $6$

and $12$ months, and $$