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    Lifetime Value: Revenue Time Series

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    Mashrur Rahman Anto
    The document discusses the lifetime value (LTV) of customers by calculating revenue over 5 years, applying an annual customer retention rate and profit margin. It then discounts future cash flows using a cost of capital to calculate net present value. It also outlines the costs of acquiring new customers each year to determine the cost of customer acquisition (COCA). The LTV analysis shows the profit generated by each customer over their lifetime is Rs. 30,601.13 once discounted, while the COCA decreases each subsequent year as acquisition costs are spread over more customers.

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    Lifetime Value: Revenue Time Series

    Uploaded by

    Mashrur Rahman Anto
    20 views2 pages
    The document discusses the lifetime value (LTV) of customers by calculating revenue over 5 years, applying an annual customer retention rate and profit margin. It then discounts future cash flows using a cost of capital to calculate net present value. It also outlines the costs of acquiring new customers each year to determine the cost of customer acquisition (COCA). The LTV analysis shows the profit generated by each customer over their lifetime is Rs. 30,601.13 once discounted, while the COCA decreases each subsequent year as acquisition costs are spread over more customers.

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    LTV & COCA MGT405

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    The document discusses the lifetime value (LTV) of customers by calculating revenue over 5 years, applying an annual customer retention rate and profit margin. It then discounts future cash flows using a cost of capital to calculate net present value. It also outlines the costs of acquiring new customers each year to determine the cost of customer acquisition (COCA). The LTV analysis shows the profit generated by each customer over their lifetime is Rs. 30,601.13 once discounted, while the COCA decreases each subsequent year as acquisition costs are spread over more customers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    20 views2 pages

    Lifetime Value: Revenue Time Series

    Uploaded by

    Mashrur Rahman Anto
    The document discusses the lifetime value (LTV) of customers by calculating revenue over 5 years, applying an annual customer retention rate and profit margin. It then discounts future cash flows using a cost of capital to calculate net present value. It also outlines the costs of acquiring new customers each year to determine the cost of customer acquisition (COCA). The LTV analysis shows the profit generated by each customer over their lifetime is Rs. 30,601.13 once discounted, while the COCA decreases each subsequent year as acquisition costs are spread over more customers.

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    of 2

    Lifetime Value

    Revenue time series: Year 0(৳) Year 1(৳) Year 2(৳) Year 3(৳) Year 4(৳) Year 5(৳)

    Price of vegetable 18250 18250 18250 18250 18250 18250


    Next product purchase rate 85% 85% 85% 85% 85%
    Gross margin 70% 70% 70% 70% 70% 70%
    Profit from vegetable 12775 10859 10859 10859 10859 10859
    Cost of capital 35% 35% 35% 35% 35% 35%
    Present value 100% 65% 42.25% 27.46% 17.85% 11.60%
    Present value above cost of 12775 7058.35 4587.93 2981.88 1938.33 1259.64
    capital
    Net present value of profits 30601.13

    Cost of Customer Acquisition (COCA)

    Sales and Marketing budget


    Year 1(৳) Year 2(৳) Year 3(৳)
    Sales salary 50000 100000 150000
    Total advertise cost 30000 20000 20000
    Website cost 150000 150000 150000
    Events 100000 100000 100000
    Transportation cost 100000 100000 100000
    Supply cost 18000 28000 38000

    Total 448000 458000 468000


    150 300 500
    Number of new customers
    COCA for year 2986.67 1660 1116

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