ry Jx B C D E NUN $100.00 50% 0.5 + 0.2 100,000 2.00 Formulas =1/B5 1 Value of a Loyal Customer 2 3 Revenue per unit 4 Percent contribution margin to profit and overhead 5 Repurchase frequency (purchases/year) 6 Customer retention rate 7 Number of customers representing 1 percent market share 8 9 Buyer's life cycle 10 11 VLC 12 Value of a 1 percent change in market share 13 14 Customer retention rate 15 16 Buyer's life cycle 17 18 VLC 19 Value of a 1 percent change in market share 20 21 22 23 24 25 #N/A #N/A 0.8 #N/A #N/A #N/A Excel Online Activity: VLC Assume that a customer in the small contractor target market segment buys an electric drill on average every two years (or every 0.5 year) for $100, when the gross margin on the drill averages 50 percent. 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. IHAT DU X Open spreadsheet Questions 1. What is the value of a loyal customer (VLC) if the customer retention rate is 20 percent? Round your answer to the nearest cent. $ 2. What is the value of a loyal customer (VLC) if the customer retention rate increases to 80 percent? Round your answer to the nearest cent. $ 3. What is a 1 percent change in market share worth to the manufacturer if it represents 100,000 customers? Round your answers to the nearest doltar. 20 percent customer retention rate case: $ 80 percent customer retention rate case: $ 4. What do you conclude? If customer retention can be increased from 20 to 80 percent through better value chain performance, the economic payoff is