Professional Documents
Culture Documents
Qualification
Rate
60.0%
30.0%
30.0%
Conversion
Rate
85.0%
85.0%
85.0%
Total
Cost
1,250,000.00
200,000.00
175,000.00
Co
Cu
60.0%
90.0%
85.0%
85.0%
30,000.00
50,000.00
Total
1,705,000.0
0
Total
Cost
Co
Cu
Appendix:
Exhibit 2: Alpen Bank Cost of Acquisition Affluent (& Most Affluent) only
Unit
Prospect
Response Qualification
Cost
Reached
Rate
Rate
Direct Mail- Affluent
Only
0.50
1,250,000
3.000%
60.0%
Take One- Affluent Only
0.10
2,000,000
2.500%
15.0%
FSI- Affluent Only
0.05
3,500,000
1.500%
15.0%
Direct Sales
(10 Sales Person)
3,000.00
60,000
2.500%
60.0%
Branch Cross Sales
1.00
50,000
50.000%
90.0%
Conversion
Rate
85.0%
85.0%
85.0%
625,000.00
200,000.00
175,000.00
85.0%
85.0%
30,000.00
50,000.00
1,080,000.0
0
Total
18,600,000
18.20%
3,385,200
37.13
23.50
86.63
36.75
60.63
205,244,676.0
0
Affluent (A)
18,600,00
0
15.00%
2,790,000
123.38
344,230,200.0
0
209.75
503,274,150.0
0
FY2
FY3
FY4
0
50000
50000
50000
50000
100000
100000
50000
150000
150000
50000
200000
122.78
122.78
122.78
122.78
20.00
18.70
38.70
17.50
18.70
17.50
36.20
15.00
18.70
15.00
33.70
12.50
18.70
12.50
31.20
84.07
4,203,621.35
105.28
86.57
9,592,386.00
107.78
89.07
15,231,150.64
110.28
91.57
21,119,915.28
Fixed Costs:
Advertising Cost
2,000,000.00
2,000,000.00
2,000,000.00
*** Fixed Overhead
5,000,000.00
5,750,000.00
6,500,000.00
Net Profit
-2,796,378.65
1,842,386.00
6,731,150.64
Cumulative Profit Over Years
-2,796,378.65
-953,992.65
5,777,157.99
* Assumption: Alpen gains 50,000 credit card customer every year over four-years period
** Assumption: Direct Variable Cost decrease 2.50 per credit card holder for every increase of 50,000 customers
*** Assumption: Fixed Overhead Cost increased 750,000 for every increase of 50,000 customers
2,000,000.00
6,500,000.00
12,619,915.28
18,397,073.27
Exhibit 5: Alpen Credit Card Budget- Affluent and Most Affluent only
Affluent and Most Affluent Only
FY2
FY3
FY1
Number of Customer
Old Customer
*New Customer
Total Customers
Revenue Per Customer (Exhibit 3)
Variable Costs Per Customer:
** Direct Variable Cost- New & Old
Acquisition Cost- New (Exhibit 2)
Total Variable Cost- Per Old Customer
Total Variable Cost- Per New Customer
Contribution Margin- Per Customer:
Contribution Margin- Per Old Customer
Contribution Margin Per New Customer
Total Contribution Margin
FY4
0
50000
50000
50000
50000
100000
100000
50000
150000
150000
50000
200000
163.31
163.31
163.31
163.31
20.00
18.31
17.50
18.31
17.50
35.81
15.00
18.31
15.00
33.31
12.50
18.31
12.50
30.81
145.81
127.50
13,665,712.34
148.31
130.00
150.81
132.50
21,331,438.15
29,247,163.96
38.31
125.00
6,249,986.54
Fixed Costs:
Advertising Cost
2,000,000.00
2,000,000.00
2,000,000.00
*** Fixed Overhead
5,000,000.00
5,750,000.00
6,500,000.00
Net Profit
-750,013.46
5,915,712.34
12,831,438.15
Cumulative Profit Over Years
-750,013.46
5,165,698.88
17,997,137.03
* Assumption: Alpen gains 50,000 credit card customer every year over four-years period
** Assumption: Direct Variable Cost decrease 2.50 per credit card holder for every increase of 50,000 customers
*** Assumption: Fixed Overhead Cost increased 750,000 for every increase of 50,000 customers
2,000,000.00
7,250,000.00
19,997,163.96
37,994,300.99
Exhibit 8: Breakeven Formula with 5,000,000 Accumulative Profit Affluent and Most Affluent only
Breakeven 5,000,000 Cumulative Profit
= (Old Customer Contribution Margin * 50,000 Old Customer)
+ (New Customer Contribution Margin * X New Customer) - Total Fixed Cost
5,750,013.46 = (145.81 * 50,000) + (127.50X) - 7,750,000
X= 48,702 of New Customer
Number of Breakeven with 5M Profit = 98,702 customer