Reference no: EM133539780

Questions

1. Netflix starts the year with 100 000 South African subscribers. These subscribers can leave/ terminate their contracts at any time, so they are all regarded as at-risk customers. During the year 40 000 new subscribers join the Netflix service because of additional South African content being added, and 25 000 existing subscribers decid to cancel their subscription due to thecost of subscription.

What two metrics can immediately be calculated from this scenario?

Calculate the two metrics that you have identified and give short feedback for each metric to Netflix as to how they can interpret the metric results and one strategy going forward that takes the metric into account.

2. Netflix has revealed to you that it cost them R100 000 during 2022 to attract new customers and to convince them to subscribe. Fortunately for Netflix, they did not have to spend too much on retaining their existing customer base, they only had to provide R20 000 worth of free services in order to retain them.

Calculate the average acquisition cost per customer and the average retention cost per customer.