Data Entry Area Lifetime Value Calculated Results. Do not enter any data here.

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Table 1 Table 2
Acquisition Second Third Acquisition Second Third
Code Variables Year Year Year Variables Year Year Year
A Orders per year 1.1 1.2 1.3 Retained Customers 200,000 121,200 86,537
B Average Order Size $90 $100 $120 Referred Customers 2,000 2,424 2,596
C Retention Rate 60.0% 70.0% 80.0% Total Customers 202,000 123,624 89,133
D Referral Rate 1.0% 2.0% 3.0% Retention Rate 60% 70% 80%
E Cost Percent 60% 58% 57% Referral Rate 1.0% 2.0% 3.0%
F Acquisition Cost Each $32 0 0 Orders per year 1.1 1.2 1.3
G Marketing Cost Each $3 $10 $10 Average Order Size $90 $100 $120
H Special Program Cost $2 $2 $2 Annual Revenue $19,998,000 $14,834,880 $13,904,733
I Database Cost $4 $4 $4
J Referral Incentives $15 $15 $15 Cost % of Revenue 60% 58% 57%
K Interest Rate 6.0% 6.0% 6.0% Product Costs $11,998,800 $8,604,230 $7,925,698
L Risk Factor 1.60 1.60 1.60 Acquisition Cost $6,400,000 0 0
M Days delay in payment 30 30 30 Marketing Cost $606,000 $1,236,240 $891,329
N Segment Size 200,000 NA NA Special Program Cost $404,000 $247,248 $178,266
Database Cost $808,000 $494,496 $356,532
If you have no data in a field, enter zero. Referral Incentives $30,000 $36,360 $38,942
Total Costs $20,246,800 $10,618,574 $9,390,766

Net Revenue ($248,800) $4,216,306 $4,513,967

Discount Rate 1.01 1.10 1.21
NPV Revenue ($246,933) $3,818,119 $3,729,625
Cum NPV Revenue ($246,933) $3,571,186 $7,300,811
Lifetime Value ($1.23) $17.86 $36.50