Retain customers so that the discount pays off

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Reference no: EM132214092

Lefties Auto Repair is trying to figure out the CLV for their customers. This will help them know how much they should spend to keep a customer and/or acquire a new customer. On average a repair is $150 and most customers come in 2 times a year. According to their records, a customer is retained for 3 years. Using the simplified equation below, what is the CLV of the typical Lefties’ customer? CLV = (Average Repair x # of visits/year) x Years Retained

Based on the CLV, if Lefties offers customers a $25 discount on each service, how long does he need to retain customers so that the discount pays off? Round to the nearest year.

Reference no: EM132214092

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