Maru batting center case

MARU BATTING CENTER – MEMORANDUM
Date: October 13, 2014
To: Prof. Peter Magnusson
From: CARLOS A. MORENO (CAM)
Subject: Customer Lifetime Value Analysis for Maru Batting Center

Solution to case questions:


The customer acquisition cost for each customer segment is showed in exhibit 1. Entertainment seekers are the least expensive customer to acquire (2000 yen /customer). This group is followed by Little Leaguers and summer sluggers (10.000 yen / customer) and finally we have the most expensive groups to acquire that are Elite Ball player’s party (50.000 yen / customer) and Elite
Ballplayers print ad (60.000 yen / customer).



The break even for each customer segment is showed in exhibit 2. The Elite Ballplayers (print ad) segment has the longest break even (3.19 years). The break even for the Little Leaguer, Elite Ball
Players (Party) and Summer Sluggers occur between the second and the third year. The break even for Entertainment seekers segment is the quickest. It only takes 1.95 years.



The highest LTV is showed in Exhibit 3 . The results was the following: the best segment was the
Elite BallPlayers (party) (14459 yen/customer), followed by Elite Ball Players (Ad) (5378 yen / customer) then we have the Little Leaguers segment (4983 yen / customer) and Finally the
Summer Slugers Segment (869 yen / customer) and the Entertainment Seekers ( 161.32 yen / customer) 

In my opinion, the best option if we talk about the most attractive customer segment is the Elite
Ballplayer (party) segment because it has the highest life time value , the second quickest break even prospect and the highest amount of profit

Exhibits

Exhibit 1

Little
Leaguers

Elite
Elite
Summer
Entertainment
Ballplayers Ballplayers
Sluggers
Seekers
(Print Ad)
(Party)
¥1.500
¥300
¥12.500
¥50
15,0%
0,5%
25,0%
2,5%
¥10.000 ¥60.000
¥50.000
¥2.000

Contact Cost
Response Rate
Acquisition Cost

¥1.000
10,0%
¥10.000

Workers