Please respond to all five (5) questions below:
1) What causes individual customers to migrate in different directions and at different rates (see customer dynamics)? Discuss the related factors.
2) Discuss each of the following approaches & processes for managing customer dynamics. Please use a discussion format.
i) Lifecycle approach
ii) Dynamic segmentation approach
iii) Acquisition, expansion, retention (AER) model
iv) Lost customer approach
3) What are three (3) benefits of employing a CLV strategy?
4) MP#1 and MP#2?
i) How does MP#1 relate to MP#2?
ii) How can knowledge of MP#1 help with designing effective MP#2 strategies?
5. Calculate the CLV for the following:
A manager of a cable company wants to determine if it is strategic to acquire the Brett family, by estimating their household-level CLV. The manager estimates that it will cost the company $80 (A)to get the Bretts’ to switch, and the Bretts’ will generate $150 profit each year (M), with a $30 annual marketing cost to retain them (C). The estimated retention rate (r) is 65%, and the current discount rate is 5%.(d)
i) CLV=
ii) Based on your calculation, are the Brett’s profitable to the cable company?
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