Please Post Your Analytic Plan On How To Tackle

Please Post Your Analytic Plan On How You Propose To Tackleq 5 To9 I

Please post your analytic plan on how you propose to tackle questions 5 to 9. You should write about half a page (approximately 5) sentences. Use the provided numbers to create a customer lifetime value (LTV) chart. Determine the third-year LTV of customers for each scenario using the given data: number of customers, retention rate, visits per year, order size, growth rates, costs, discounts, and additional features like birthday clubs, email, and website integration. Calculate the profit gain from introducing features such as the birthday club and digital channels. Focus on how these elements affect the third-year LTV and overall profitability, providing a clear, step-by-step forecasting methodology based on the provided parameters.

Paper For Above instruction

In developing an analytic plan to evaluate customer lifetime value (LTV) across different scenarios, my approach involves constructing detailed financial models that incorporate the key variables provided: customer base, retention rates, purchase frequency, order size, growth projections, costs, and discount rates. For questions 5 to 9, I will establish baseline LTV calculations for each scenario, then adjust parameters to account for added features like the birthday club, email and website marketing channels, and their respective costs and revenue impacts.

First, I will calculate the third-year LTV for the customer base of 746,219 when considering a retention rate of 44% with a visit frequency of 1.2 per year, growing at 20% annually, and an average order size of $104.40 growing at 10%. I will determine net revenue by deducting marginal costs (55%) and marketing & database costs (10%), then discount future cash flows using the provided discount rates (1, 1.1, 1.21). This calculation involves projecting revenue streams over three years, explicitly accounting for growth in visits and order size, then applying retention rates to model customer churn.

Next, I will incorporate the impact of the birthday club in scenario 6, which provides an additional $0.95 per customer annually, along with the same customer base but with altered retention (64%) and growth parameters (visit frequency 1.8, growing 20%, and order size $110.44, growing 10%). I will redo the LTV computation with these adjustments. The calculation must include the incremental revenue from the birthday club and its associated costs, to accurately estimate profit contribution and the third-year LTV.

For question 7, I will explicitly quantify the profit gains from adding the birthday club by comparing the projected profits with and without this feature in the third year, considering the number of customers (746,219). This entails calculating the incremental revenue from the $0.95 birthday benefit per customer, deducting marginal costs and marketing expenses, and discounting these gains to their present value at the specified rates.

In questions 8 and 9, I will extend the analysis to incorporate e-mails and online channels alongside physical stores. With a customer base of 746,219, retention rate of 64%, and increasing sales via store visits (up 5%), website sales (up 5%), and email sales (up 5%), I will project the third-year total revenue and order size ($133.63, growing 5%). The cost structure, including 45% marginal costs and 20% marketing costs, will be used to compute the net profit. The impact of digital channels will be evaluated by comparing the LTV with and without these features, focusing on the incremental profits attributable to online engagement.

Finally, I will synthesize these projections to estimate the total increase in third-year profits resulting from integrating email and website channels, alongside traditional sales channels. Each calculation will hinge on the precise growth assumptions, retention rates, costs, and discount factors provided, producing a comprehensive view of how these strategic features enhance customer lifetime value and overall profitability.

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