Business, 15.02.2021 20:40 ambinicole66

Velo Mobile Telecommunications spends an average of $840 to acquire a new customer and has an overall 75% retention rate. Velo offers its customers three different plans: the premium package, purchased by 30% of customers for $65 per month; the super-premium package, purchased by 20% of customers for $100 per month ($65 for premium package benefits plus $35 for a mobile device data plan); and the basic package, purchased by the remaining customers for $40 per month. Average gross margin for Velo is 40%. a. What is the customer lifetime value (CLV) of a (a) basic, (b) premium, and (c) super-premium customer? (Assume a 10% discount rate.) b. If the company currently has 1 million customers, what is the maximum it should be willing to spend to improve its customer retention rate from 75% to 85%?

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