Sprint is curious as to how much value each customer provides tothe firm.  Management has estimated that it currently costs $5on average to acquire and attract a new customer.  Most customers sign up for the $79.99/month phone plan with a margin of$61.99.  Past audits of the firm’s data suggests that most customers remain with Sprint for 7 years.

1. What is the CLV?

2. What if the salesperson upsells new customers to the premier plan of $99.99 per month with a cost of $20/month to the firm?

 

3. What happens to CLV if customer satisfaction decreases and retention drops to 2 years (the required time of the sales contract)?

 

 

Answer rating: 100% (QA)

1 The CLV is 5 2 The CLV is 9 3 The CLV is 2 Explanation 1 The CLV is calculated by ... View the full answer