Q 1) Less than $50 year 0 year 1 year 2 year 3 year 4 year 5 0 1 2 3 4 5 customers 4657 4046 1918 970 927 820 revenue 148278. 9 151464. 8 109129. 4 71418. 95 68788. 16 58617.
59 Profit (without mailing cost) 62277. 13 63615. 22 45834. 33 29995. 96 28891. 03 24619.
39 mailing cost 3958. 45 27942 27942 27942 27942 27942 net profit 58318. 68 35673. 22 17892. 33 2053. 959 949.
0272 -3322. 61 discount 0. 1 0. 1 0. 1 0. 1 0.
1 0. 1 n pv profit 58318. 68 32430. 2 14787. 05 1543. 17 648.
1983 -2063. 08 cumulative 58318. 68 90748. 88 105535. 9 107079. 1 107727.
3 105664. 2 customer LTV 12. 5228 19. 48655 22. 66178 22. 99315 23.
13234 22. 68933 Q 2) Greater than $50 year 0 year 1 year 2 year 3 year 4 year 5 0 1 2 3 4 5 customers 3296 2875 1653 866 761 623 revenue 314932. 8 334213 182311. 3 89091.
25 71684. 16 65503. 62 Profit (without mailing cost) 132271. 8 140369. 4 76570. 73 37418.
33 30107. 35 27511. 52 mailing cost 2801. 6 19776 19776 19776 19776 19776 net profit 129470.
2 120593. 4 56794. 73 17642. 33 10331.
35 7735. 52 discount rate 0. 1 0. 1 0.
1 0. 1 0. 1 0. 1 n pv profit 129470. 2 109630. 4 46937.
79 13254. 94 7056. 449 4803. 15 cumulative 129470.
2 239100. 6 286038. 4 299293. 3 306349.
8 311152. 9 customer LTV 39. 281 72. 54265 86. 78349 90. 80501 92.
94592 94. 40319 Q 3) Customer Acquisition Cost Number of Customers 7953 total number of catalogs sent 345782. 6 Total Cost 293915. 2 Cost/Customer 36. 95652 Customers Whose Initial Purchase is > $50: From the table in Q 2 we see that Tuscan is making a profit of $57.
The Term Paper on Starbucks Delivering Customer Service
Segmenting customers based on their lifetime value is a powerful way to target them because marketing mix activities can then aim at enhancing customer value. (Ho, 2006) Roughly translated, customer lifetime value is the projected profits that a customer will generate during their lifetime. We used the case data to segment Starbucks customers into three distinct categories of unsatisfied, ...
44 per customer over a 5-year period. From Exhibit 2 of the case we see that the majority of purchases for this category are made in years 1 and 2. Tuscan may be able to increase per customer profits in this category by maintaining the same mailing frequency (8 catalogs per year) for the first 2 years and then decreasing the frequency (to say 4 per year) in subsequent years thereby decreasing the mailing costs while still maintaining relatively the same response rate from customers. Also we see from exhibit 2 that the number of multiple sales in a year is relatively high which seems to indicate that these may be loyal customers.
A referral reward system may be used to incentivize these customers to try and rope in more customers. Customers Whose Initial Purchase is < $50: From the table in Q 1 we see that even after a 5-year period, customers in this category still do not produce a profit for Tuscan. We see from Exhibit 1 of the case that from year 2 onwards the response rate of customers in this category falls rapidly. Also noted is the fact that the number of buyers who purchase only 1 item compared to the other category. This seems to indicate that customers in this category are only trying out the catalog service as a fad or one time thing and do not see any incentive to re-order. A gift card or a rewards system may provide enough incentive for repeat customers.
Q 4) The 5-year time period does not provide a large enough data sample to provide an accurate picture of consumer behavior. It only provides information about the average consumer or a very broad segment of consumers which is not very helpful if we want to target our marketing efforts at say our most profitable customers. It would be much more useful if we had data for customer responses for say every period in which a catalog was mailed. Q 5) Since the company is essentially marketing household items targeted at a women of a certain profile, it may be useful to have data on the number of consumers who are home owners, consumers who have recently purchased a new home, number of consumers that are house-wives, number of consumers that are repeat customers etc.
The Essay on Automated Customer Service Consumer Longer Operator
Automated Customer Service: Advantages Outweigh Disadvantages The marketplace in the world today is more competitive than ever before. Businesses are trying to increase profits and lower operating costs. Stockholders are insisting that companies make money, thus increasing their stock portfolios. Consumers are busier than at any point in the history of man. They work longer hours and try to ...
Basically we are looking for information that would enable us to take the entire customer base and divide it into segments which can then be analyzed using cost / profitability and resource allocation considerations so that marketing efforts are more efficient. Q 6) The time of purchase would provide valuable information. If customers made most of their purchases during the holiday season, marketing efforts could be focused on this part of the year instead of wasting effort on sending catalogs throughout the year. Data that provides a period by period history of purchases would provide a better picture of buying patterns. This can also indicate the level of dormancy of a customer or customer segment. Also, product data may prove useful.
If most of the customers are interested in only a certain product or product category, the catalog itself may be modified for.
