Maru
Maru Batting Center
1.
a. 10,000
b. 10,000
c. 60,000
d. 50,000
e. 2,000
2.
a. 20 hours (2 years)
b. 6.7 hours (1.7 years)
c. 40 hours (2 years)
d. 3.3 hours (1.7 years)
e. 2 hours (1.3 years)
3.
a. 5,714.29
b. 1,000
c. 6,000
d. 16,000 i. Yes.
e. 200
4. An Elite Ballplayer if MBC purchases the list and invites all target customers to the gala event is the most attractive customer segment for MBC to target. Although the contact cost is very high, the customers’ response rate is also relatively high from this event. As the customers are elites, MBC could charge them a lot. The retention rate is good. Finally, the CLV of this campaign is the highest comparing to other segments.
5. Yes. By decreasing the contact cost per person from 1,000 to 600, the acquisition cost for pursuing the Chiyoda ward sponsorship is also reduced to 7,500. As the variable costs of the Little League customers remain unchanged and the retention rate is 65%, the CLV the Chiyoda ward is 4,722 while Minato is 5714. However, the Chiyoda has twice the Little League customers than Minato, thus the response customers of Chiyoda is 1.6 times than Minato. Averagely, the value could be brought from Chiyoda/Minato is 7555/5714. Thus MBC should pursue the Chiyoda ward sponsorship.
6. Yes. When the retention rate increases to 75% and price per hour decreases to 7,000, the gross CLV becomes 72,857.14. The original gross CLV of this segment is 66,000. As the contact costs are the same in these two cases, it could be not taken into account. Thus, MBC should offer this promotion.
7. No. With the increase in response rate and successful contact cost, the acquisition cost rises to (12,500/29%+10,000)=53,103. As there is no change in other variables, the high acquisition cost implicates the low CLV. Thus, she should not offer this promotion.
1.
a. 10,000
b. 10,000
c. 60,000
d. 50,000
e. 2,000
2.
a. 20 hours (2 years)
b. 6.7 hours (1.7 years)
c. 40 hours (2 years)
d. 3.3 hours (1.7 years)
e. 2 hours (1.3 years)
3.
a. 5,714.29
b. 1,000
c. 6,000
d. 16,000 i. Yes.
e. 200
4. An Elite Ballplayer if MBC purchases the list and invites all target customers to the gala event is the most attractive customer segment for MBC to target. Although the contact cost is very high, the customers’ response rate is also relatively high from this event. As the customers are elites, MBC could charge them a lot. The retention rate is good. Finally, the CLV of this campaign is the highest comparing to other segments.
5. Yes. By decreasing the contact cost per person from 1,000 to 600, the acquisition cost for pursuing the Chiyoda ward sponsorship is also reduced to 7,500. As the variable costs of the Little League customers remain unchanged and the retention rate is 65%, the CLV the Chiyoda ward is 4,722 while Minato is 5714. However, the Chiyoda has twice the Little League customers than Minato, thus the response customers of Chiyoda is 1.6 times than Minato. Averagely, the value could be brought from Chiyoda/Minato is 7555/5714. Thus MBC should pursue the Chiyoda ward sponsorship.
6. Yes. When the retention rate increases to 75% and price per hour decreases to 7,000, the gross CLV becomes 72,857.14. The original gross CLV of this segment is 66,000. As the contact costs are the same in these two cases, it could be not taken into account. Thus, MBC should offer this promotion.
7. No. With the increase in response rate and successful contact cost, the acquisition cost rises to (12,500/29%+10,000)=53,103. As there is no change in other variables, the high acquisition cost implicates the low CLV. Thus, she should not offer this promotion.