How much is the gross profit of the subscription service

Assignment Help Marketing Management

Reference no: EM133410432

Question: A website mynews.com offers curated news services for its subscribers. The subscription fee is $80 per year for each subscriber, and the attributed cost for serving each customer is $55 each year. The cost is assumed to be constant over the planning horizon. To evaluate the values of the customers who joined in January 2022, the customer analytics team conduct a series of
modeling exercises. Based on one model result, the existing customers have a retention rate of 70% each year. The company uses a discount rate of 5%.

a. How much is the gross profit of the subscription service for each customer per year?

b. What is the churn rate each year, based on the analytics team's modeling results?

c. In next year's dollars, what is the gross profit each customer is expected to generate in the next year?

d. In today's dollars, what is the gross profit one customer is expected to generate in the next year?

e. In today's dollars, calculate the CLV for the cohort of January 2022, for five years, until 2026.

Reference no: EM133410432

Questions Cloud

What ways was the settlement house movement : what ways was the Settlement House movement similar to the evolution of Charity Organization Societies? In what ways were they different

Based on what you know about structure of dna : Based on what you know about the structure of DNA, which of the following must also be true for its double stranded DNA?

Dominance inheritance pattern : Red and white flower alleles show an incomplete dominance inheritance pattern.

Do you think quarantellis prediction : Consider the last 20 years: do you think Quarantelli was correct? Furthermore, do you think Quarantelli's prediction will be true 20 years from now

How much is the gross profit of the subscription service : How much is the gross profit of the subscription service for each customer per year? What is the churn rate each year, based on the analytics team's modeling

Analyze how the event influenced societys thinking : Analyze how the event influenced societys thinking and behavior? Explain. Support this response with scholarly literature, sociological theories, etc

Understanding of the definitions of health : Demonstrate an understanding of the definitions of health, the classification and manifestations of major mental disorders and health promotion strategies

Do you think that the american dream is a myth : Do you think that the American Dream is a myth? What about sociologists? Define the two forms of social mobility, and the American Dream

AED diagnoses the heartbeat : Why is it important for a first responder to ensure that no one is touching the victim as the AED diagnoses the heartbeat?

User Account

All Pages