Customer Lifetime Value †A Case Study Essay

A Your manager asks you what you mean might beg off the differences in p, r, and AC between the three groups. What would you say? i separate 1s higher p could be due to the accompaniment that this group of students doesnt watch the repast plan that undergrad students who racy on (or close to) campus have. Addition each(prenominal)y, some MBA students may have longer classes than the natural undergad student, especially on weekends. The MBA students may be to a greater extent inclined to get more food to save and snack on during class sessions.The property probability through a certain time r is expect to be higher for undergrad students who live on or nigher to campus and cigaret easily walk to the sandwich shop. MBA students still have a high property rate, but following the completion of their MBA program, theyre little likely to drive to Ikes for food since they commute to school (especially if they have a hot sandwich shop from where they commute). Regarding AC, the c ost to recruit Ikes for people familiar with the area ( congregation 2) is expected to be dismay because the Bay Area natives already have some knowledge of Ikes.The AC for Groups 1 & 3 are higher because Ikes must agitate their business to people who have most likely never comprehend of the sandwich shop through ads, Facebook, or coupons. b What do you think could be done to improve CLV for any of the groups? Describe a specific action that can be taken by red-header and explain how it alters the variables and CLV in the table for one or more groups. ii I expected the CLV for Group 3 to be higher considering the distance from the school. It could be so low due to the meal plan those students might have, but by decreasing the AC from 25 to 20, CLV will increase from 2. to 7. 5.The can be done by focusing their advertising efforts aimed at students to strictly on campus efforts. Perhaps they could similarly utilize social media for free advertising and introduce a garget card where after a certain amount of sandwiches bought, the customer can get a free one. This would possibly help increase the remembering rate of all groups, especially Group 1 where these MBA students dont have an on campus meal plan and often look for good food and money saving incentives off campus.Additionally, if the keeping rate for Group 1 went from . 0 to . 825 through the use of the thrust cards and dismantle coupons for a free drink or chips, the CLV would increase from 7 to 11. 667 almost putting Group 1 even with Group 2. And if the retention rate for Group 3 went from . 825 to . 85 through the use of the punch cards again, the CLV would increase from 2. 5 to 6. 875. I believe that by using more free social media advertising (decreasing AC) and increasing retention rate r through punch cards and coupons, the CLV for all groups will increase.