Billbuddy
Question 1: Incremental Customer Lifetime Value
Calculated using revenue per costumers (ARPU) at 21 month average life time and 10% per annum discount rate. Average life time | | 21 | months | | | Discount rate | | 10 | % = | 0.83% | per month | | Average customers | YBB customers | | | | ARPU/month | 24 | 29 | | | | NPV | $460.61 | $556.57 | | | | Incremental value | | $95.96 | | | |
Question 2: Sensitivity Analysis on Incremental Lifetime value of YBB Average life time changes | Life time (mths) | Average customers | YBB customers | Incremental value | up 25% | 26.25 | 563.76 | 681.21 | 117.45 | down 25% | 15.75 | 352.87 | 426.38 | 73.51 | up 50% | 31.5 | 662.51 | 800.53 | 138.02 | down 50% | 10.5 | 240.33 | 290.40 | 50.07 |
The carriers will always realize higher incremental value. At an extreme case of 1day average life-time (assuming customer changes his/her mind and switch back after one day), carriers still have incremental value of $0.17 from additional revenue.
Question 3: YBB and other distributors (a) Carriers should be willing to pay additional $5 to YBB vs to distributors. This is because the additional fee of $5 is a relatively small percentage—ranging between 5 and 10%-- of total incremental value that carriers will get from YBB customers. Average life time | Customer life time (mths) | Incremental customer value | YBB incremental fee % to incremental value | Current | 21.00 | $95.96 | 5.21% | up 25% | 26.25 | $117.45 | 4.26% | down 25% | 15.75 | $73.51 | 6.80% | up 50% | 31.5 | $138.02 | 3.62% | down 50% | 10.5 | $50.07 | 9.99% |
(b) The recurring monthly fee to YBB should be $1.82/month, assuming discount rate of 10% and average lifetime of customers of 21 months, calculated using = PMT(10/12,21,35)
Question 4: YBB customers * 95% of people who try the service will have savings. * 71% of people who try YBB will switch under the no fee scenarios
Question 5:
Calculated using revenue per costumers (ARPU) at 21 month average life time and 10% per annum discount rate. Average life time | | 21 | months | | | Discount rate | | 10 | % = | 0.83% | per month | | Average customers | YBB customers | | | | ARPU/month | 24 | 29 | | | | NPV | $460.61 | $556.57 | | | | Incremental value | | $95.96 | | | |
Question 2: Sensitivity Analysis on Incremental Lifetime value of YBB Average life time changes | Life time (mths) | Average customers | YBB customers | Incremental value | up 25% | 26.25 | 563.76 | 681.21 | 117.45 | down 25% | 15.75 | 352.87 | 426.38 | 73.51 | up 50% | 31.5 | 662.51 | 800.53 | 138.02 | down 50% | 10.5 | 240.33 | 290.40 | 50.07 |
The carriers will always realize higher incremental value. At an extreme case of 1day average life-time (assuming customer changes his/her mind and switch back after one day), carriers still have incremental value of $0.17 from additional revenue.
Question 3: YBB and other distributors (a) Carriers should be willing to pay additional $5 to YBB vs to distributors. This is because the additional fee of $5 is a relatively small percentage—ranging between 5 and 10%-- of total incremental value that carriers will get from YBB customers. Average life time | Customer life time (mths) | Incremental customer value | YBB incremental fee % to incremental value | Current | 21.00 | $95.96 | 5.21% | up 25% | 26.25 | $117.45 | 4.26% | down 25% | 15.75 | $73.51 | 6.80% | up 50% | 31.5 | $138.02 | 3.62% | down 50% | 10.5 | $50.07 | 9.99% |
(b) The recurring monthly fee to YBB should be $1.82/month, assuming discount rate of 10% and average lifetime of customers of 21 months, calculated using = PMT(10/12,21,35)
Question 4: YBB customers * 95% of people who try the service will have savings. * 71% of people who try YBB will switch under the no fee scenarios
Question 5: