Question: FitPro + operates on a subscription - based model, charging customers a monthly fee. Below are key financial details: Average revenue per customer per month:
FitPro operates on a subscriptionbased model, charging customers a monthly fee. Below are key financial details:
Average revenue per customer per month: $
Profit margin:
Retention rate: per year
Discount rate: per year
FitPro is considering a new social media advertising campaign. The campaign is expected to acquire new customers, with a total cost of $
Compute CLV: Using the formula, calculate the CLV of a single customer for FitPro Show your calculations.
Interpretation: What does this CLV tell you about the longterm value of each customer?
Based on your findings, should FitPro proceed with the campaign? Justify your answer.
What are some potential risks or limitations of using CLV as the sole decisionmaking metric for this investment?
What other factors besides CLV might influence the companys decision to run this campaign?
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