Question

Assume that a customer shops at a local grocery store spending ak average if $200 a week, resulting in the retailer earning a $25 profit each week from this customer. Assuming the shopper visits the store all 52 weeks of the year, calculate the customer lifetime value if this shopper remains logal over a 10-year life-span.

Answer 1

$13,000

Explanation:

We have been given that the retailer earns a $25 profit each week from a customer.

The shopper visits the store all 52 weeks of the year, so number of weeks in 10 years would be 10 times 52 that is 520 weeks.

We know that the customer lifetime value stands for a prediction of the net profit attributed to the entire future relationship with a customer.

The customer lifetime value would be profit made per week times number of weeks the customer will shop.

`\text{The customer lifetime value}=\$25* 520`

`\text{The customer lifetime value}=\$13,000`

Therefore, the customer lifetime value would be $13,000.