Customers affected by the action plan (% changed)

Repurchase: 16.51%
Recommendation: 16.34%

Parameters to be specified:

Evaluation horizon (years): 5

Discount rate (%): 15.00%

Total number of customers

potentially affected by action plan: 1000000

Margin ($) on each sale: $ 145.00

Cost of action plan: $ 5,000,000.00

year 1 year 2
Year(s) of next purchase decision: 0 1
(note: 0 = no purchase; 1 = purchase)
year 1 year 2
Year(s) of positive recommendation:
(note: 0 = no recommendation; 1 = recommendation) 1 1

Change in % retention (purchase) 25.99%

for a customer moving from a score
below approximately
"90" to a score above "90":

Change in number of recommendations 0.65

buying the same brand for a customer
moving from a score below approximately
"90" to a score below "90":

Cash Flow Analysis: (NOTE: THE FIGURES BELOW DIFFER FROM THOSE IN THE COURSE SLIDES DUE TO
THE SPREADSHEET IN THE SLIDES CARRIED THE ESTIMATED REPURCHASE AND RE
NOT ROUNDED UP TO TWO DIGITS AS DONE IN THIS SPREADSHEET)

Year: 0 1 2

Gross Cash Flows: $ (5,000,000.00) $ 15,400,450.00 $ 21,622,326.05

Discounted Cash Flows: $ (5,000,000.00) $ 13,391,695.65 $ 16,349,584.91
Total Net Present Value of Action Plan: $ 54,422,701.18
 year 3 year 4 year 5
0 0 1

year 3 year 4 year 5

1 1 1

THOSE IN THE COURSE SLIDES DUE TO ROUNDING;

HE ESTIMATED REPURCHASE AND RECOMMENDATION PERCENTAGES OUT TO FIVE DIGITS,
E IN THIS SPREADSHEET)

3 4 5

$ 15,400,450.00 $ 15,400,450.00 $ 21,622,326.05

$ 10,126,045.86 $ 8,805,257.27 $ 10,750,117.48