Customer Lifetime Value and Return on Marketing

Case 4: Conroy’s Acura – Customer Lifetime Value and Return on Marketing
Questions

Suppose Conroy’s Acura embarks on an advertising campaign to increase the sales of the CSX, a car with a $2360 markup. De Lima calculates that if the firm spends $20,000, sales of the car to new customers will increase by 10. What is the ROM of the move in net present value (NPV) terms?
If Conroy’s Acura reduces the average markup of the RSX to seven percent, how many more cares would need to be sold to make the move profitable?
The firm is considering introducing three different programs to increase customer retention:
One free oil change per year (increases the annual cost of maintaining the customer relationship from $10 to $30)
Four free oil changes per year (increases annual cost from $10 to $90)
Four free premium oil changes per year (increases the annual cost from $10 to $130)
Using the data in Question 3—for programs a, b, and c, assume one new sale per car class, two new sales per car class, and three new sales per car class, respectively. What retention rate would the company need to achieve to make the programs profitable?
What strategy (or set of strategies) should Conroy implement to improve his company’s long-run profitability?

Don't use plagiarized sources. Get Your Custom Essay on
Customer Lifetime Value and Return on Marketing
Just from $13/Page
Order Essay

Place Order
Grab A 14% Discount on This Paper
Pages (550 words)
Approximate price: -
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Try it now!

Grab A 14% Discount on This Paper

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.