The Brita Company hires you as a consultant to determine the CLV for a typical buyer of its pitcher and filter 'system'.  The price of the pitcher system is $25.50, the manufacturing cost per unit of the pitcher is $20, and the advertising and promotion per unit of the pitcher system sold is $7.50. The price of the replacement filter is $3.50, the manufacturing cost per unit of the filter is $1.50, and the advertising and promotion per unit of the filter is $0.50. Assume that customers replace the filter once at the end of each year.

 

What is the customer acquisition cost of each customer (assume that each customer buys only one pitcher)?

What is the margin on each filter sold?

What is the break-even time for each customer?

If the customer remains active for 3 years, and the discount rate is 10%, what is the CLV of a not-yet-acquired customer?

Answer rating: 100% (QA)

To determine the Customer Lifetime Value CLV for a typical buyer of Britas pitcher and filter system ... View the full answer