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2 years ago

What is the maximum amount your firm can afford to spend to increase customer retention from 61 % to 78 %?

Business

1 answer:

sergij07 [2.7K]2 years ago

7 0

Answer:

$ 636.76

Explanation:

One of the ways firms increase their profits is through customer retention and to do this money must also be spent to continue satisfying the customers. So, without mincing words let's dive straight into the solution to the problem above.

STEP ONE: determine the margin and use the value to calculate for Customer life time value.

Margin = [o.f × a.o × r.m] - ycp= [ 1.9 × $527 × 0.6 ] - 44 = $556.78.

where o.f = order frequency, a.o = average order, r.m = retail markup, and ycp = yearly cost of promotion.

Therefore, the Customer life time value at 61% retention rate is calculated as below;

Customer life time value at 61% retention rate = 556.78 × { 0.61/ 1 + 0.11 - 0.61}.

Customer life time value at 61% retention rate = $679.2716.

Customer life time value at 78% retention rate = 556.78 × { 0.78/ 1 + 0.11 - 0.78}.

Customer life time value at 78% retention rate = $1316.03

STEP TWO: determine the maximum amount your firm can afford to spend to increase customer retention from 61 % to 78 %.

Therefore, the maximum amount = Customer life time value at 78% retention rate - Customer life time value at 61% retention rate.

The Maximum amount = 1316.03 - 679.2716 = $ 636.7584 = $ 636.76

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3 years ago

Which of the following is an example of a cross-functional business process?

Westkost [7]

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<h3>What is a cross-functional business process?</h3>

The cross-functional business process is a business process that involves many divisions or departments. Each department contributes its part to the production workflow or to the fulfillment of the process.

For example, in <u>creating a new product</u>, many departments must be involved. Other processes that involve many departments are product development, lead management, client orders processing, and other critical processes.

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Answer:

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Explanation:

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3 years ago

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irga5000 [103]

Answer:

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