IH's new I$-$Tread product launch came during a particularly opportune time. With the extended pandemic and the subsequent Delta Variant during $2021,$ demand for at$-$home fitness solutions soared. The I$-$Tread has seen sales surge since it began taking pre$-$orders in early $2020,$ with delivery delays currently ranging between five to seven weeks. The long lead time is a common issue faced by other at$-$home fitness companies such as Peloton. IH currently sells three hardware bundles for the I$-$Tread, starting at $$2,495,$ that include the smart treadmill and accessories like barbells, dumbbells, a folding bench, a kettlebell system, a squat rack, a workout mat, a recovery foam roller and a heart rate monitor, depending on which bundle customers select. Users can also pay a $$39$ monthly subscription to access on$-$demand, live classes, access to AI driven real time feedback and instruction, and any software updates during the year.

To take advantage of the newly formed domestic manufacturer and software design firm, they are moving quickly to reduce the new debt. IH's leadership team spent time reviewing sources of information on the gym and exercise equipment industry including reports from global business consulting firm IBISWorld. Data from the report provided direction as to their revised strategic plan. IH's strategic plan focuses on increasing revenues with increased share of the connected fitness space and reducing costs with more effective supply chain management. IH has the manufacturing plant and one warehouse in Pennsylvania but must expand quickly to improve delivery to end users ordering online, and non$-$retail customers such as physical therapy practices. The I$-$Tread is also working on rolling out individualized programs for their competitive athletes, at home health and fitness customers, and physical therapy and trainer customers. The customizable AI smart programs will launch at the end of the year as $"$My Workout", $"$My Trainer", and $"$My Therapy". $3.$ Establish competitive advantage with patented AI software apps and interactive equipment, starting with the I$-$Tread.

$4.$ Expand the client base beyond retail customers and large fitness gyms. Targeted segments include university workout and training rooms, amateur and professional running clubs and teams, and the at home customer.

$5.$ Set up a new supply chain distribution network that optimizes delivery efficiency, reduces costs, and improves customer satisfaction.

$\backslash (\backslash$underline$\{$U$\}\backslash )$ pdates already produced some interesting results. The most recent customer profile report focused on customers who searched and bought home exercise equipment during the pandemic:

$-$ The moderate lifetime$-$value customer$-$will send periodic product updates and discounts. Single female, early $30$s$,$ Bachelor's degree, lives in suburbs, high browsing activity, rarely returns purchases.

The present market share data per equipment segment still supports IH's decision to start with their smart treadmill $($the I$-$Tread$).$

IH's response to the increase in market intensity is to focus on sustained competitive advantage, based on customer satisfaction. Trainer", and $"$My Therapy". Subscription based workouts are priced at $\backslash (\backslash$$ $39\backslash )$ per month. The at$-$home model is priced at $\backslash (\backslash$$ $2,495\backslash )$ and the professional model is $\backslash (\backslash$$ $3,999\backslash ).$

$-$ Exercise bikes or elliptical$-$average annual sales $\backslash (\backslash$$ $1,750\backslash )$; average profit margin is $\backslash (8\backslash \%\backslash )$; expected lifetime $12$ years.

The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations.

Questions

Use the data to calculate customer lifetime value $($CLV$).$ Round your answers to the nearest dollar.

What is the most attractive customer type?