Verizon spends an average of $400 to acquire a customer.
Annual maintenance costs is $35/customer.Record-keeping and billing costs are $30 per customer per annum.The price of a basic service is $20 per month.
30% of customers buy an upgrade package at $40 per month,10% buy the unlimited package at $70 per month.Over time, 70% of customers remain with the company from 1 year to the next.
Please show calculations:
a) What is the lifetime value of an average customer?
b) What is the lifetime value of of the unlimited customer?