C-Spire Communications, a cellular communications provider based in Mississippi, charges $79 per month for an unlimited...

 

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C-Spire Communications, a cellular communications provider based in Mississippi, charges $79 per month for an unlimited service plan. The company wants to determine Customer Lifetime Value (CLV). Variable costs per account are $30 and monthly retention marketing expenditures are $10 per account. C-Spire has a churn rate of 18%. The discount rate used to project present value of future profits is 10%. 13. Calculate the current Customer Lifetime Value for C-Spire Communications. Calculate in cell M11. (4 points) 14. In a quest to boost long-term profits, C-Spire's director of marketing is considering two approaches: Increase monthly price to $85 Improve customer service in an effort to reduce churn rate from 18% to 15%. CLV Calculate CLV for each of the two approaches being considered. For each calculation only change the focal variable (revenue Increase revenue or churn rate). Hold all other variables constant from the original scenario. Calculate in cells M16 and M18. (4 points) 15. Which approach should C-Spire Communications make a focus for increasing CLV? Why? Enter answer in space below. (3 points) Decrease churn C-Spire Communications, a cellular communications provider based in Mississippi, charges $79 per month for an unlimited service plan. The company wants to determine Customer Lifetime Value (CLV). Variable costs per account are $30 and monthly retention marketing expenditures are $10 per account. C-Spire has a churn rate of 18%. The discount rate used to project present value of future profits is 10%. 13. Calculate the current Customer Lifetime Value for C-Spire Communications. Calculate in cell M11. (4 points) 14. In a quest to boost long-term profits, C-Spire's director of marketing is considering two approaches: Increase monthly price to $85 Improve customer service in an effort to reduce churn rate from 18% to 15%. CLV Calculate CLV for each of the two approaches being considered. For each calculation only change the focal variable (revenue Increase revenue or churn rate). Hold all other variables constant from the original scenario. Calculate in cells M16 and M18. (4 points) 15. Which approach should C-Spire Communications make a focus for increasing CLV? Why? Enter answer in space below. (3 points) Decrease churn

Answer rating: 100% (QA)

To calculate the current Customer Lifetime Value CLV for CSpire Communications we need to consider t... View the full answer