Customer acquistion cost

Contact Cost Response rate Acquistion cost

1 Little leaguer 1000 10% 10000
2 Summer Sluggers 1500 15% 10000
3 Elite Ballplayers(AD) 300 0.50% 60000
4 Elite Ballplayers(Party) 12500 25% 50000
5 Entertainment seekers 50 2.50% 2000
LL SS
year 1 year 2 year 3 year 1
Contact Cost 1000 Contact Cost 1500
Response Rate % 10% Response Rate % 15%
Acquisition Cost 10000 Acquisition Cost 10000
Worker Needed 2 2 2 Worker Needed 1
Worker Cost/Hr 1500 1500 1500 Worker Cost/Hr 1500
Instructors Needed 1 1 1 Instructors Needed 0
Instructors Cost/Hr 3000 3000 3000 Instructors Cost/Hr 0
Total Cost/Hr 6000 6000 6000 Total Cost/Hr 1500

revenue/Hr 6500 6500 6500 revenue/Hr 3000

hourly margin 500 500 500 hourly margin 1500
Margin % 0.076923 0.076923 0.076923 Margin % 0.5
Annual Hr 10 10 10 Annual Hr 4
annual margin 5000 5000 5000 annual margin 6000
less acquisition cost 10000 0.75 0.5625 less acquisition cost 10000
retention 75% retention 50%

profit -5000 3750 2812.5 profit -4000

cumalative profit -5000 -1250 1562.5 cumalative profit -4000

EB(Print) ES
year 1 year 2 year 3 year 1
Contact Cost 12500 Contact Cost 50
Response Rate % 25.00% Response Rate % 2.50%
Acquisition Cost 50000 Acquisition Cost 2000
Worker Needed 1 1 1 Worker Needed 2
Worker Cost/Hr 1500 1500 1500 Worker Cost/Hr 1500
Instructors Needed 1 1 1 Instructors Needed 0
Instructors Cost/Hr 4500 4501 4502 Instructors Cost/Hr 0
Total Cost/Hr 6000 6000 6000 Total Cost/Hr 3000

revenue/Hr 7500 7500 7500 revenue/Hr 4000

hourly margin 1500 1500 1500 hourly margin 1000
Margin % 0.2 0.2 0.2 Margin % 0.25
Annual Hr 20 20 20 Annual Hr 1.5
annual margin 30000 30000 30000 annual margin 1500
less acquisition cost 50000 0.6 0.36 less acquisition cost 2000
retention 60% retention 35%

profit -20000 18000 10800 profit -500

cumalative profit -20000 -2000 8800 cumalative profit -500
 EB(Print)
year 2 year 3 year 1 year 2 year 3 year 4
Contact Cost 300
Response Rate % 0.50%
Acquisition Cost 60000
1 1 Worker Needed 1 1 1 1
1500 1500 Worker Cost/Hr 1500 1500 1500 1500
0 0 Instructors Needed 1 1 1 1
0 0 Instructors Cost/Hr 4500 4501 4502 4503
1500 1500 Total Cost/Hr 6000 6000 6000 6000

3000 3000 revenue/Hr 7500 7500 7500 7500

1500 1500 hourly margin 1500 1500 1500 1500
0.5 0.5 Margin % 0.2 0.2 0.2 0.2
4 4 Annual Hr 20 20 20 20
6000 6000 annual margin 30000 30000 30000 30000
0.5 0.25 less acquisition cost 60000 0.6 0.36 0.216
retention 60%

3000 1500 profit -30000 18000 10800 6480

-1000 500 cumalative profit -30000 -12000 -1200 5280

year 2

2
1500
0
0
3000

4000
1000
0.25
1.5
1500
0.35
35%

525
25
 LL
year 1 year 2 year 3 year 4 year 5 year 6
Contact Cost 1000
Response Rate % 10
Acquisition Cost 10000
Worker Needed 2
Worker Cost/Hr 1500
Instructors Needed 1
Instructors Cost/Hr 3000
Total Cost/Hr 6000 6000 6000 6000 6000 6000

revenue/Hr 6500 6500 6500 6500 6500 6500

hourly margin 500 500 500 500 500 500
Margin % 8
Annual Hr 10
annual margin 5000 5000 5000 5000 5000 5000
less acquisition cost 10000 0.75 0.5625 0.421875 0.316406 0.237305
retention 1

profit -5000 3750 2812.5 2109.375 1582.031 1186.523

cumalative profit -5000 -1250 1562.5 3671.875 5253.906 6440.43
net present value -5000 3409.091 2324.38 1584.805 1080.549 736.7377
cumalative NPV -5000 -1590.909 733.4711 2318.276 3398.824 4135.562

SS
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Contact Cost 1500 1500 1500 1500 1500 1500
Response Rate % 15 15 15 15 15 15
Acquisition Cost 10000
Worker Needed 1 1 1 1 1 1
Worker Cost/Hr 1500 1500 1500 1500 1500 1500
Instructors Needed 0 0 0 0 0 0
Instructors Cost/Hr 0 0 0 0 0 0
Total Cost/Hr 1500 1500 1500 1500 1500 1500

Price/Hr 3000 3000 3000 3000 3000 3000

Margin/Hr 1500 1500 1500 1500 1500 1500
Margin % 50
Annual Hr 4
Annual Margin 6000 6000 6000 6000 6000 6000
less acquisition cost 10000 0.5 0.25 0.125 0.0625 0.03125
retention 50 50 50 50 50

profit -4000 3000 1500 750 375 187.5

cumalative profit -4000 -1000 500 1250 1625 1812.5
net present value -4000 3000 1500 750 375 187.5
cumalative NPV -4000 -1000 500 1250 1625 1812.5

EB (Print) year 2 year 3 year 4 year 5 year 6

Contact Cost 300
Response Rate % 0.5
Acquisition Cost 60000
Worker Needed 1
Worker Cost/Hr 1500 1500 1500 1500 1500 1500
Instructors Needed 1 1 1 1 1 1
Instructors Cost/Hr 4500 4500 4500 4500 4500 4500
Total Cost/Hr 6000 6000 6000 6000 6000 6000

Price/Hr 7500 7500 7500 7500 7500 7500

Margin/Hr 1500 1500 1500 1500 1500 1500
Margin % 20
Annual Hr 20 20 20 20 20 20
Annual Margin 30000 30000 30000 30000 30000 30000
Annual Margin %
acquistion 60000 0.6 0.36 0.216 0.1296 0.07776
Retention Rate 60

profit -30000 18000 10800 6480 3888 2332.8

cumalative profit -30000 -12000 -1200 5280 9168 11500.8
net present value -30000 16363.64 8925.62 4868.52 2655.556 1448.485
cumalative NPV -30000 -13636.36 -4710.744 157.7761 2813.332 4261.818

1 2 3 4 5

EB (Party)
year 1 Year 2 year 3 year 4 year 5 year 6
Contact Cost 12500
Response Rate % 25
Acquisition Cost 50000
Worker Needed 1 1 1 1 1 1
Worker Cost/Hr 1500 1500 1500 1500 1500 1500
Instructors Needed 1 1 1 1 1 1
Instructors Cost/Hr 4500 4500 4500 4500 4500 4500
Total Cost/Hr 6000 6000 6000 6000 6000 6000

Price/Hr 7500 7500 7500 7500 7500 7500

Margin/Hr 1500 1500 1500 1500 1500 1500
Margin % 20
Annual Hr 20 20 20 20 20 20
Annual Margin 30000 30000 30000 30000 30000 30000
Annual Margin %
less acqusition 50000 0.6 0.36 0.216 0.1296 0.07776
Retention Rate 60 60 60 60 60 60

profit -20000 18000 10800 6480 3888 2332.8

cumalative profit -20000 -2000 8800 15280 19168 21500.8
net present value -20000 16363.64 8925.62 4868.52 2655.556 1448.485
cumalative NPV -20000 -3636.364 5289.256 10157.78 12813.33 14261.82
1 2 3 4 5

ES
Year 1 Year 2 Year 3 Year 4
Contact Cost 50
Response Rate % 2.5
Acquisition Cost 2000
Worker Needed 2 2 2 2
Worker Cost/Hr 1500 1500 1500 1500
Instructors Needed 0 0 0 0
Instructors Cost/Hr 0 0 0 0
Total Cost/Hr 3000 3000 3000 3000

Price/Hr 4000 4000 4000 4000

Margin/Hr 1000 1000 1000 1000
Margin % 25 25 25 25
Annual Hr 1.5 1.5 1.5 1.5
Annual Margin 1500 1500 1500 1500
Annual Margin %
less acquistion 2000 0.35 0.1225 0.042875
Retention Rate 35

profit -500 525 183.75 64.3125

cumalative profit -500 25 208.75 273.0625
net present value -500 477.2727 151.8595 48.31893
cumalative NPV -500 -22.72727 129.1322 177.4512
1 2 3
year 7 year 8 year 9 year 10 year 11 year 12

6000 6000 6000 6000 6000 6000

6500 6500 6500 6500 6500 6500

500 500 500 500 500 500

5000 5000 5000 5000 5000 5000

0.177979 0.133484 0.100113 0.075085 0.056314 0.042235

889.8926 667.4194 500.5646 375.4234 281.5676 211.1757

7330.322 7997.742 8498.306 8873.73 9155.297 9366.473
502.3212 342.4917 233.5171 159.2162 108.5565 74.01579
4637.883 4980.375 5213.892 5373.108 5481.665 5555.68

Year 7 Year 8 Year 9 Year 10

1500 1500 1500 1500
15 15 15 15

1 1 1 1
1500 1500 1500 1500
0 0 0 0
0 0 0 0
1500 1500 1500 1500

3000 3000 3000 3000

1500 1500 1500 1500

6000 6000 6000 6000

0.015625 0.007813 0.003906 0.001953
50 50 50 50

93.75 46.875 23.4375 11.71875

 1906.25 1953.125 1976.563 1988.281
93.75 46.875 23.4375 11.71875
1906.25 1953.125 1976.563 1988.281

year 7 year 8 year 9 year 10 year 11 year 12 year 13 year 14

1500 1500 1500 1500 1500 1500 1500 1500

1 1 1 1 1 1 1 1
4500 4500 4500 4500 4500 4500 4500 4500
6000 6000 6000 6000 6000 6000 6000 6000

7500 7500 7500 7500 7500 7500 7500 7500

1500 1500 1500 1500 1500 1500 1500 1500

20 20 20 20 20 20 20 20
30000 30000 30000 30000 30000 30000 30000 30000

0.046656 0.027994 0.016796 0.010078 0.006047 0.003628 0.002177 0.001306

1399.68 839.808 503.8848 302.3309 181.3985 108.8391 65.30347 39.18208

12900.48 13740.29 14244.17 14546.5 14727.9 14836.74 14902.04 14941.23
790.0829 430.9543 235.066 128.2178 69.93699 38.14745 20.8077 11.34965
5051.901 5482.855 5717.921 5846.139 5916.076 5954.223 5975.031 5986.38

6 7 8 9 10 11 12 13

year 7 year 8 year 9 year 10 year 11 year 12 year 13

1 1 1 1 1
1500 1500 1500 1500 1500 1500 1500
1 1 1 1 1 1 1
4500 4500 4500 4500 4500 4500 4500
6000 6000 6000 6000 6000 6000 6000

7500 7500 7500 7500 7500 7500 7500

1500 1500 1500 1500 1500 1500 1500
 20 20 20 20 20
30000 30000 30000 30000 30000 30000 30000

0.046656 0.027994 0.016796 0.010078 0.006047 0.003628 0.002177

60 60 60 60 60

1399.68 839.808 503.8848 302.3309 181.3985 108.8391 65.30347

22900.48 23740.29 24244.17 24546.5 24727.9 24836.74 24902.04
790.0829 430.9543 235.066 128.2178 69.93699 38.14745 20.8077
15051.9 15482.85 15717.92 15846.14 15916.08 15954.22 15975.03
6 7 8 9 10 11 12
In order to find whih is the most attractive segment among the available options we should
evaluate in which segment we are getting maximum CLV.
The CLV of different segments are : -
1) Little Leaguers - 5555.68
2) Summer Sluggers - 1906.25
3) Elite Ballplayers (Ad) - 5975.031
4) Elite Ballplayers (Party) - 15975.03
5) Entertainment Seekers - 177.4512
From the above CLVs we can see the Elite Ballplayers (Party) gives MBC the
maximum CLV, so according to data the most attractive segment for MBC is Elite Ballplayers
(Party).
Chiyoda Ward
LL
year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8
Contact Cost 600
Response Rate % 8%
Acquisition Cost 7500
Worker Needed 2 2 2 2 2 2 2 2
Worker Cost/Hr 1500 1500 1500 1500 1500 1500 1500 1500
Instructors Needed 1 1 1 1 1 1 1 1
Instructors Cost/Hr 3000 3000 3000 3000 3000 3000 3000 3000
Total Cost/Hr 6000 6000 6000 6000 6000 6000 6000 6000

revenue/Hr 6500 6500 6500 6500 6500 6500 6500 6500

hourly margin 500 500 500 500 500 500 500 500
Margin % 0.076923 0.076923 0.076923 0.076923 0.076923 0.076923 0.076923 0.076923
Annual Hr 10 10 10 10 10 10 10 10
annual margin 5000 5000 5000 5000 5000 5000 5000 5000
less acquisition cost 7500 0.65 0.4225 0.274625 0.178506 0.116029 0.075419 0.049022
retention 65%

profit -2500 3250 2112.5 1373.125 892.5313 580.1453 377.0945 245.1114

cumalative profit -2500 750 2862.5 4235.625 5128.156 5708.302 6085.396 6330.507
net present value -2500 2954.545 1745.868 1031.649 609.6109 360.2246 212.86 125.7809
cumalative NPV -2500 454.5455 2200.413 3232.062 3841.673 4201.898 4414.758 4540.539
1 2 3 4 5 6 7

Minato Ward

year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8

LL
Contact Cost 1000
Response Rate % 10
Acquisition Cost 10000
Worker Needed 2
Worker Cost/Hr 1500
Instructors Needed 1
Instructors Cost/Hr 3000
Total Cost/Hr 6000 6000 6000 6000 6000 6000 6000 6000

revenue/Hr 6500 6500 6500 6500 6500 6500 6500 6500

hourly margin 500 500 500 500 500 500 500 500
Margin % 8
Annual Hr 10
annual margin 5000 5000 5000 5000 5000 5000 5000 5000
less acquisition cost 10000 0.75 0.5625 0.421875 0.316406 0.237305 0.177979 0.133484
retention 1
profit -5000 3750 2812.5 2109.375 1582.031 1186.523 889.8926 667.4194
cumalative profit -5000 -1250 1562.5 3671.875 5253.906 6440.43 7330.322 7997.742
net present value -5000 3409.091 2324.38 1584.805 1080.549 736.7377 502.3212 342.4917
cumalative NPV -5000 -1590.909 733.4711 2318.276 3398.824 4135.562 4637.883 4980.375

Note : - The NPV of Chiyoda Ward is less than Minato Ward so MBC should not opt for Chiyoda Ward
year 9

2
1500
1
3000
6000

6500
500
0.076923
10
5000
0.031864

159.3224
6489.83
74.32508
4614.864
8

year 9 year 10 year 11 year 12

6000 6000 6000 6000

6500 6500 6500 6500

500 500 500 500

5000 5000 5000 5000

0.100113 0.075085 0.056314 0.042235
500.5646 375.4234 281.5676 211.1757
8498.306 8873.73 9155.297 9366.473
233.5171 159.2162 108.5565 74.01579
5213.892 5373.108 5481.665 5555.68
 EB (Party)
year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8
Contact Cost 12500
Response Rate % 25
Acquisition Cost 50000
Worker Needed 1 1 1 1 1 1 1 1
Worker Cost/Hr 1500 1500 1500 1500 1500 1500 1500 1500
Instructors Needed 1 1 1 1 1 1 1 1
Instructors Cost/Hr 4500 4500 4500 4500 4500 4500 4500 4500
Total Cost/Hr 6000 6000 6000 6000 6000 6000 6000 6000

Price/Hr 7500 7000 7000 7000 7000 7000 7000 7000

Margin/Hr 1500 1000 1000 1000 1000 1000 1000 1000
Margin % 20 0.142857 0.142857 0.142857 0.142857 0.142857 0.142857 0.142857
Annual Hr 20 20 20 20 20 20 20 20
Annual Margin 30000 20000 20000 20000 20000 20000 20000 20000
Annual Margin %
less acqusition 50000 0.75 0.5625 0.421875 0.316406 0.237305 0.177979 0.133484
Retention Rate 75

profit -20000 15000 11250 8437.5 6328.125 4746.094 3559.57 2669.678

cumalative profit -20000 -5000 6250 14687.5 21015.63 25761.72 29321.29 31990.97
net present value -20000 13636.36 9297.521 6339.219 4322.195 2946.951 2009.285 1369.967
cumalative NPV -20000 -6363.636 2933.884 9273.103 13595.3 16542.25 18551.53 19921.5
1 2 3 4 5 6 7

Note - Maru should go with his brother's advice as the CLV of the customer is higher here when
compared to the original one.
year 9 year 10 year 11 year 12 year 13 year 14 year 15

1 1 1 1 1 1 1
1500 1500 1500 1500 1500 1500 1500
1 1 1 1 1 1 1
4500 4500 4500 4500 4500 4500 4500
6000 6000 6000 6000 6000 6000 6000

7000 7000 7000 7000 7000 7000 7000

1000 1000 1000 1000 1000 1000 1000
0.142857 0.142857 0.142857 0.142857 0.142857 0.142857 0.142857
20 20 20 20 20 20 20
20000 20000 20000 20000 20000 20000 20000

0.100113 0.075085 0.056314 0.042235 0.031676 0.023757 0.017818

2002.258 1501.694 1126.27 844.7027 633.527 475.1453 356.359

33993.23 35494.92 36621.19 37465.89 38099.42 38574.56 38930.92
934.0683 636.8647 434.226 296.0632 201.8612 137.6327 93.84045
20855.57 21492.43 21926.66 22222.72 22424.58 22562.22 22656.06
8 9 10 11 12 13 14
 EB (Party)
year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8
Contact Cost 22500
Response Rate % 29%
Acquisition Cost 77586.207
Worker Needed 1 1 1 1 1 1 1 1
Worker Cost/Hr 1500 1500 1500 1500 1500 1500 1500 1500
Instructors Needed 1 1 1 1 1 1 1 1
Instructors Cost/Hr 4500 4500 4500 4500 4500 4500 4500 4500
Total Cost/Hr 6000 6000 6000 6000 6000 6000 6000 6000

Price/Hr 7500 7500 7500 7500 7500 7500 7500 7500

Margin/Hr 1500 1500 1500 1500 1500 1500 1500 1500
Margin % 20 20 20 20 20 20 20 20
Annual Hr 20 20 20 20 20 20 20 20
Annual Margin 30000 30000 30000 30000 30000 30000 30000 30000
Annual Margin %
less acqusition 77586.207 0.75 0.5625 0.421875 0.316406 0.237305 0.177979 0.133484
Retention Rate 75

profit -47586.21 22500 16875 12656.25 9492.188 7119.141 5339.355 4004.517

cumalative profit -47586.21 -25086.21 -8211.207 4445.043 13937.23 21056.37 26395.73 30400.24
net present value -47586.21 20454.55 13946.28 9508.828 6483.292 4420.426 3013.927 2054.95
cumalative NPV -47586.21 -27131.66 -13185.38 -3676.553 2806.739 7227.165 10241.09 12296.04
1 2 3 4 5 6 7

Note - MBC should opt for this choice as it offeres a greater CLV than it was earlier.
year 9 year 10 year 11 year 12 year 13 year 14 year 15 year 16

1 1 1 1 1 1 1 1
1500 1500 1500 1500 1500 1500 1500 1500
1 1 1 1 1 1 1 1
4500 4500 4500 4500 4500 4500 4500 4500
6000 6000 6000 6000 6000 6000 6000 6000

7500 7500 7500 7500 7500 7500 7500 7500

1500 1500 1500 1500 1500 1500 1500 1500
20 20 20 20 20 20 20 20
20 20 20 20 20 20 20 20
30000 30000 30000 30000 30000 30000 30000 30000

0.100113 0.075085 0.056314 0.042235 0.031676 0.023757 0.017818 0.013363

3003.387 2252.541 1689.405 1267.054 950.2906 712.7179 534.5384 400.9038

33403.63 35656.17 37345.58 38612.63 39562.92 40275.64 40810.18 41211.08
1401.102 955.2971 651.3389 444.0947 302.7919 206.449 140.7607 95.97319
13697.15 14652.44 15303.78 15747.88 16050.67 16257.12 16397.88 16493.85
8 9 10 11 12 13 14 15