Marketing

MK130: Marketing and Sales Ecosystem Management - Project 1

Customer Lifetime Value

Project Description:

It can be expensive to get a new customer, but once you have attracted a customer you must stay focused on keeping that customer because over time that customer can represent big value to your business.

For Project 1, you will learn how to calculate the Customer Lifetime Value so that you have a better idea of how much to spend in marketing.

Imagine you own a coffee-shop. You have a customer, Manny, that comes in every day, Monday – Friday. This customer orders a latte priced at $3.75. The latte costs you $0.73 to make.

Answer the following questions:

1. How many cups of coffee does Manny buy a year?

2. How much does Manny spend at your coffee-shop in a year?

3. What is your profit from Manny’s purchases in a year?

4. If Manny comes to your coffeeshop consistently for 20 years, what is his Customer Lifetime Value?

You must show your mathematical equations to receive credit for your answer. Submit your answers to Project 1 in Moodle.

FOR INSTRUCTOR USE ONLY

Grading Rubric

Grading accepts a start value of 100. Points will be deducted for failure to fully complete or meet the stated requirements. 90-100 = Represents work of superior quality (A); 80-89 = Represents work of good to very good quality (B); 70-79 = Represents adequate command of class content (C); 69 and below = Represents work that shows a need for development or improvement (F); 0 = Represents plagiarized work (F).

MK130: Marketing and Sales Ecosystem Management (BCM)

Student:

Instructor:

Date:

Project 1: Customer Lifetime Value

Description of requirements	Possible Points	Your Points
Answered the following questions: 1. How many cups of coffee does Manny buy a year?	20
1. How much does Manny spend at your coffee-shop in a year?	20
2. What is your profit from Manny’s purchases in a year?	20
3. If Manny comes to your coffeeshop consistently for 20 years, what is his Customer Lifetime Value?	20
Showed your mathematical equations for each answer	20
TOTAL	100

YOUR SCORE: ________

Instructor Comments: