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Assume that Shannon’s decides to move forward with its loyalty / rewards program. Estimates for the cost per customer are $5.96 per month. Average customer margins, before subtracting off the cost of the loyalty / rewards program, are expected to be 33.37. Assuming that Shannon’s wishes to obtain a minimum CLV of $120, what is the required retention rate that must be achieved? Assume that the interest rate is 1% per month. Compute your answer to the nearest 1/100 of a percent e.g. 50.13%. However, do not include the % symbol.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92690975

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