1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Marizza181 [45]
3 years ago
9

Cool Beans is a locally owned coffeeshop that competes with two large coffee chains, PlanetEuro and Frothies. Alicia, the owner,

is considering two different marketing promotions and thinks that CLV analysis will help her decide the best course of action. An average specialty coffee drink sells for $3.40 and has a margin of 65%. One promotion is providing loyalty cards to her regular customers that would give them one free specialty coffee drink after 10 regular purchases. Alicia estimates that this will increase the frequency of their purchases by 13%. Currently, her customers average buying 2 specialty drinks per week. The second promotion is targeted at new customers. She would offer a free specialty drink to incoming college freshmen by providing a coupon with their orientation packages. Because of her location near the college, she expects that 550 students will come to Cool Beans for a free trial. Of those, she anticipates that 18% will become regular customers who will purchase at least one specialty drink each week. The cost of printing and distributing the coupons is $115.
What is the CLV of a customer over the time horizon of one year prior to introduction of the loyalty program?
Business
1 answer:
gavmur [86]3 years ago
5 0

Answer:

Cool Beans

The CLV of a customer over the time horizon of one year prior to the introduction of the loyalty program is:

=  $353.60

Explanation:

a) Data and Calculations:

Price of average specialty coffee drink = $3.40

Profit Margin = 65%

Profit Margin = $2.21 ($3.40 * 65%) per drink

Average drinks per customer per week = 2

Total drinks in a year = 104 (2 * 52)

Profit Margin in a year = $229.84 ($2.21 * 104)

Therefore, the Customer Lifetime Value = Gross Revenue

= $3.40 * 2 * 52 = $353.60

b)  The Customer Lifetime Value (CLV) is the average purchase value multiplied by the average purchase frequency rate.  In this customer's case, the CLV is calculated for only one year and not actually for a lifetime.

You might be interested in
He [the producer] intends only his gain, and he is in this, as in many other cases, led by an invisible hand to promote an end w
Mariulka [41]

Answer:

c) the incentive structure accompanying market prices.

Explanation:

The invisible hand explains the unintentional social advantages of ego-interested actions of people, a term first proposed by Adam Smith in The Theory of Moral Sentiments, published in 1759, referencing it with respect to the distribution of revenues.Administrators offer multiple incentives, that are bonuses or encouraging variables that push the person to function effectively and in the long term interest of the principal. The incentive structures contain price / referral fees, annual bonuses and compensation for performance

4 0
4 years ago
A method for selecting multiple lines of text is to _______.
antiseptic1488 [7]
The answer to this question is by clicking and draging in the white space to the left of the lines. In word processing, copying and selecting multiple lines is a technique that can help you work on your document faster. Also in word processing, the user can create, edits, and save the document.
4 0
4 years ago
What does a social media manager do?
Rufina [12.5K]

Answer:

A social media manager manages a social media star. They arrange appointments, or things like autograph signings, they monitor or arrange partnerships, they pay lawyers when needed

Explanation:

Thanks for asking this my older cousin is one. He used to manage beyonce for a short amount of time, he did snopp dogg, he did some other people that really dont  mean anything to me

if you need more explanation i got you

4 0
3 years ago
Sarasota Company has a balance of $2,200 in Allowance for Doubtful Accounts before adjustment. The estimated uncollectibles unde
andrew-mc [135]

Answer:

Debit : Allowance for doubtful debts = $2900

Credit : Accounts receivables = $2900

Explanation:

An account for allowance for doubtful debts is a contra account created, predicting that certain debtors will not be able to pay for the goods and services they purchased. This may be based on historical experiences. Doubtful debts aren’t officially uncollectible, it is simply an estimation made, but bad debts are, where you have officially written off a certain accounts receivable as uncollectible.

An allowance for doubtful debts is recorded in the balance sheet, directly under accounts receivables. Bad debts are recorded as an expense in the income statement. When there is an allowance for doubtful debts, the bad debts account is debited and the allowance for doubtful debts account is credited.

According to the question, the balance was $2,200 (Cr) in the allowance for doubtful debts account. The initial expected amount for allowance for doubtful debts was $5100 (Cr). This means that the difference was the amount that was declared as uncollectible and officially written off i.e. bad debts. Thus $2900 ($5100 -$2200) would have been confirmed as bad debts.

The entry to record the above transaction is:

Debit : Allowance for doubtful debts = $2900

Credit : Accounts receivables = $2900

5 0
3 years ago
A depositor places $10,000 in cash in a commercial bank, where the required reserve ratio is 10 percent. The bank sends the $10,
garik1379 [7]

Answer:

C) $10,000, $1,000, and $9,000, respectively.

  • actual reserves increase by $10,000
  • required reserves increase by $1,000
  • excess reserves increase by $9,000

Explanation:

the money deposited by the client = $10,000

bank's reserve ratio is 10% = $10,000 x 10% = $1,000

since the bank kept the whole $10,000 as reserves, then:

  • actual reserves increase by $10,000
  • required reserves increase by $1,000
  • excess reserves increase by $9,000

The bank is only required to keep $1,000 in reserves, this means it can borrow the remaining $9,000 whenever they want.

7 0
3 years ago
Other questions:
  • Dirty Don's Bicycle Shop is current financed with 100% equity. The firm currently has 100,000 shares of common stock outstanding
    5·1 answer
  • What are the rights of incidental beneficiaries?
    11·1 answer
  • Arjen owns investment A and 1 bond B. The total value of his holdings is 2,607 dollars. Investment A is expected to pay annual c
    6·1 answer
  • Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant ra
    8·1 answer
  • Farmer Brian has 3 acres of land which he farms efficiently. Each acre can support 10 apple trees. However the 3 acres differ in
    7·1 answer
  • A finance lease agreement calls for quarterly lease payments of $5,376 over a 10-year lease term, with the first payment on July
    13·1 answer
  • Toby purchased a 20-year par value bond with semiannual coupons at a nominal annual rate of 8% convertible semiannually at a pri
    5·1 answer
  • Multiple Choice Question Which of the following is the correct statement about variable costs? The variable cost per unit will i
    9·1 answer
  • The impact of Furman v. Georgia (1972) was that states had to
    9·2 answers
  • Visual merchandising is three-dimensional and real, which is more effective than flat drawings or photos. True Or False
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!