CLV: PHYSICALLY FIT

WORKING THE DATA

CUSTOMER LIFETIME VALUE CALCULATOR

On the other side of the street is a community run ladies$-$only gym, called Sculptress. Sculptress has branches throughout the city and spends an average of $$50$ per member on local media advertising. Their policy is to provide an inexpensive, friendly, no frills service. As such, for them to be successful, they need to have lots of members. Sculptress's profits are $$600$ per customer per year for an average of $3$ years. They assume that they will lose $5\%$ of their members each year and use a $10\%$ discount rate per year to account for the time value of money. For simplicity, Sculptress assumes all profits are accrued at the beginning of the year.

$\backslash$table$[[,$Year $0,$Year $1,$Year $2,$Year $3],[$Profit per customer$],[$One$-$time acquisition cost$],[$Time Value Discount Rate$],[$Retention rate$],[$Profit $*$ Retention rate$],[$Present Value in year$],[$Customer Lifetime Value,,,,$]]$