In this task, you will analyze some of the data available in the Starbucks case using the CLV framework. You may complete this in any format, but please provide pdf of completion.
Please follow these instructions carefully:
• Calculate the CLV for Unsatisfied, Satisfied and Highly Satisfied customers as described in Exhibit 9 of the case (note that annual churn rate is the reciprocal of average lifetime).
• Compare the relative impact of per-visit expenditure, visit frequency and "loyalty" (i.e., length of relationship with Starbucks), respectively, on the higher CLV for Highly Satisfied, relative to the Satisfied, customers.
• Imagine you could invest in a program to improve the retention rate of customers. By how many years would you need to extend the average life of Satisfied customers to make them as valuable as the Highly Satisfied customers? Do the same thing for Unsatisfied and Satisfied customers. Interpret these findings.
• Provide a specific tactic that you think would improve the value of Satisfied customers. Link this to one more of the specific drivers of lifetime value in this case.