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Aq and Retension Spends

aq and retention

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Sanchit Jain
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198 views1 page

Aq and Retension Spends

aq and retention

Uploaded by

Sanchit Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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A company wants to maximize the CLTV of its customers over a 10 year period.

1. Current Market Size: 10,000


2. Current Customer Base: 500
3. Current Acquisition Spend: $1 per prospect
4. Current Acquisition Rate: 4%
5. Max Acquisition Rate at huge spend: 10%
6. Current Retention Spend: $8
7. Current Retention Rate: 60%
8. Max Retention Rate at Huge Spend: 80%
9. Discount Rate: 10%
10. Margin (excluding retention and Acquisition Spends) = $50 per year.

𝑅𝑒𝑡𝑒𝑛𝑡𝑖𝑜𝑛 𝑅𝑎𝑡𝑒 = 𝐶𝑒𝑖𝑙𝑖𝑛𝑔 𝑅𝑎𝑡𝑒 ∗ (1 − 𝑒 𝑘𝑟𝑒𝑡∗𝑅𝑒𝑡𝑒𝑛𝑡𝑖𝑜𝑛 𝑆𝑝𝑒𝑛𝑑 )

𝐶𝑢𝑟.𝑟𝑒𝑡 𝑅𝑎𝑡𝑒
− ln(1− )
𝐶𝑒𝑖𝑙𝑖𝑛𝑔 𝑅𝑎𝑡𝑒
𝑘𝑟𝑒𝑡 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑒𝑡 𝑆𝑝𝑒𝑛𝑑

𝐴𝑐𝑞𝑢𝑖𝑠𝑖𝑡𝑖𝑜𝑛 𝑅𝑎𝑡𝑒 = 𝐶𝑒𝑖𝑙𝑖𝑛𝑔 𝑅𝑎𝑡𝑒 ∗ (1 − 𝑒 𝑘𝑎𝑐𝑞∗𝐴𝑐𝑞𝑢𝑠𝑖𝑡𝑖𝑜𝑛 𝑆𝑝𝑒𝑛𝑑 )

𝐶𝑢𝑟. 𝑎𝑐𝑞 𝑅𝑎𝑡𝑒


− ln(1 − )
𝐶𝑒𝑖𝑙𝑖𝑛𝑔 𝑅𝑎𝑡𝑒
𝑘𝑎𝑐𝑞 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑐𝑞. 𝑆𝑝𝑒𝑛𝑑

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