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  • Caselet 3 Answer

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    Sudhanshu N Ranjan
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    CLV models have inefficiencies due to cross-dependence between input variables like retention rate, marketing spend, and discount rate. A sensitivity analysis found that retention rate had the strongest influence on CLV, while marketing spend and discount rate had moderate influences. A 15% variation in the CLV calculation would require a +9% or -10% change in the retention rate.

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    CLV models have inefficiencies due to cross-dependence between input variables like retention rate, marketing spend, and discount rate. A sensitivity analysis found that retention rate had the strongest influence on CLV, while marketing spend and discount rate had moderate influences. A 15% variation in the CLV calculation would require a +9% or -10% change in the retention rate.

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    20 views1 page

    Caselet 3 Answer

    Uploaded by

    Sudhanshu N Ranjan
    CLV models have inefficiencies due to cross-dependence between input variables like retention rate, marketing spend, and discount rate. A sensitivity analysis found that retention rate had the strongest influence on CLV, while marketing spend and discount rate had moderate influences. A 15% variation in the CLV calculation would require a +9% or -10% change in the retention rate.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Caselet 3 Answer

    CLV has certain inefficiency due to the cross-dependence between each of the individual input variables such as retention rate, marketing spend and discount rate etc.

    Sensitivity analysis was undertaken for each of the input variables identifying that the retention rate had the strongest influence on CLV with marketing spend and discount rate offering moderate influences.
    To effect a 15% variation in the CLV model calculation would require +9% or a -10% change respectively in the retention rate.

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