MKT 3500 Final: Completed Final Exam Study Guide for A.Long
Document Summary
Take a potential margin from a sale and multiply it by the probability the sale will happen at a different time. The likelihood that a person is still your customer, over time goes down. Ac=acquisition cost: the role of time discounting in clv calculations, money now is more valuable than money in the future. (uncertainty, and opportunity costs)- discount rate/interest rate, acquisition costs. Lots of money spent by companies, getting people to be their customers: advertising, promotions, email, data purchasing, etc, ac must include the money spent on everyone, ac=(total ac)/(# of people converted) Individual level costs: ac=(cost to contact 1 person)/(response rate) If you paid 200 to contact 2 people, but one made a purchase, ac = 200. Is the segment growing or shrinking: will the desired benefits change over time, customer equity, greater customer equity=more appealing segment, customer equity= market size * clv.
