# Coursera Marketing Analytics — Week #3

Page

### If the discount rate assumption increases, what will happen to CLV?

Remain the same

Decrease

Not enough information

Increase

2.

\$400

\$600

\$1,000

\$1,600

3.

### How could you calculate the increase in CLV valuation from changing payment from the end of a period to the beginning of a period?

The difference is always equal to the cost of the service or product

Subtract [\$M-\$R]x[r/(1+d-r)] from [\$M-\$R]x[(1+d)/(1+d-r)]

Subtract [\$M-\$R]x[(1+d)/(1+d-r)] from [\$M-\$R]x[r/(1+d-r)]

The difference is always equal to the price of the service or product

4.

### Natural Farms, an organic CSA, provides a pick-your-own service at their farm at a price of \$15 / week for a bushel of vegetables. There are no variable costs and they spend \$260 / year on customer retention. What is the short-term multiplier for the CLV formula?

-\$245

\$10

\$15

Without the retention rate, it is impossible to calculate the short-term multiplier

5.

\$1.02

\$13.57

\$14.57

\$25

6.

\$960

\$1,020

\$1,280

\$1,360

7.

\$3,000

\$3,200

\$4,000

\$5,000

8.

### If the retention rate increases, what will happen to the short-term multiplier?

Increase

Remain the same\

Decrease

Not enough information

9.

\$1,781.25

\$1,931.25

\$2,375

\$ 2,575

10.

### Why is CLV an important driver of company profitability?

As discount rates decrease, CLV increases resulting in higher profits for a company.

Companies can realign resources with their most profitable customers based on CLV.

Salespeople can earn higher commissions on new business.

In an increasingly competitive business environment, new customer acquisition is more important than ever.