EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Question
Chapter 2, Problem 10PA
Summary Introduction
Interpretation: The average value of a loyal customer (VLC) needs to be calculated as per the given information.
Concept Introduction: The value of a loyal customer (VLC) refers to the quantification of the total revenue generated from each client over its buying life cycle.
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Students have asked these similar questions
Use the Excel template VLC to find the average value of a loyal customer (VLC) in a target market
segment if the average purchase price is $75 per visit, the frequency of repurchase is seven times per
year, the contribution margin is 10 percent, and the average customer defection rate is 25 percent?
Round your answer to the nearest dollar.
$
Assume the average value of a loyal customer (VLC) in a target market segment if the average purchase price is
$55 per visit, the frequency of repurchase is 12 times per year, the contribution margin is 20%, and the average
customer defection rate is 30%. If the customer defection rate changed to 25%, what is the percent change in
the average VLC?
50%
O 25%
O 10%
O 20%
O 33%
When the value of a loyal customer (VLC) market segment is high, should these customers be given premium goods and services for premium prices? If the VLC is low, should they be given less service? Explain.
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