Calla & Ivy want to figure out the lifetime value of their customers. They know that the average customer's value is $50 a month, and the average lifespan of a customer is 5 years (60 months). What is the LTV?

Question

$600

$250

$3000

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1 point
2.
Question 2
 The information for Questions 2-5 will be connected.  Each subsequent question will require information from the previous questions to solve.

Calla & Ivy are now trying to figure out some of the components of lifetime value for a particular demographic that comes into the store to buy flowers. This demographic made 100 purchases and spent $12,000 in the last month. What is their Average Purchase Value?

$120

$1200

$12,000

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1 point
3.
Question 3
Next, Calla & Ivy want to figure out the purchase frequency. There were 50 people in this demographic that made purchases last month. What is the Average Purchase Frequency Rate per month?

You need to use the information in Question 2 to figure this one out.

.5

240

2

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1 point
4.
Question 4
What is the Average Customer Value per month for this particular demographic?

You need to use the information in Questions 2 & 3 to figure this one out.

$240

$60

$120

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1 point
5.
Question 5
If the average lifespan of a customer is 5 years, what is the LTV per customer for this demographic?

You need to use the answer from Question 4 to figure this one out.

$1,200

$5,000

$14,400

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1 point
6.
Question 6
 The information in Questions 6-9 is all connected.  Each subsequent question will require information from the previous questions to solve.

Inu + Neko are now trying to calculate the LTV of their customers. Last month, they made $30,000 over 1500 purchases. What was their Average Purchase Value?

$31,500

$2,000

$20

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1 point
7.
Question 7
As for Inu + Neko's purchase frequency, they were able to see that 1000 people bought something at the store. What is the Average Purchase Frequency Rate per month?

You need to use the information in Question 6 to figure this out.

1.5

30

15

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1 point
8.
Question 8
What is Inu & Neko's Average Customer Value per month?

You need to use the information from Questions 6 & 7 to figure this out.

$30

$1.5

$15

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1 point
9.
Question 9
If the average lifespan of a customer is 12 years (the lifetime of their pet), what is the LTV per customer?

You need to use the answer from Question 8 to figure this out.

$4320

$240

$360

$2880

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1 point
10.
Question 10
SnackWall has increased the yearly subscription so that the Average Purchase Value has now changed to $2500 for small businesses.  If there were 8 small businesses that each purchased one yearly subscription in the past year, and the Average Customer Lifespan is 10 years, what would the customer LTV for small businesses be?

$20,000

$300,000

$25,000

$200,000

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1 point

GPT-4o mini · Answer

Let’s break down each question step by step.

Question 1

To find the Lifetime Value (LTV) of a customer: LTV = Average Customer Value per month × Average Lifespan (in months)

Given:

Average Customer Value per month = $50
Average Lifespan = 5 years = 5 * 12 = 60 months

LTV = $50 * 60 = $3000

Question 2

To find the Average Purchase Value: Average Purchase Value = Total Revenue / Number of Purchases

Given:

Total Revenue = $12,000
Number of Purchases = 100

Average Purchase Value = $12,000 / 100 = $120

Question 3

To find the Average Purchase Frequency Rate per month: Average Purchase Frequency Rate = Number of Purchases / Number of Customers

Given:

Number of Purchases = 100
Number of Customers = 50

Average Purchase Frequency Rate = 100 / 50 = 2

Question 4

To find Average Customer Value per month for this demographic: Average Customer Value per month = Average Purchase Value × Average Purchase Frequency Rate

From previous questions:

Average Purchase Value = $120
Average Purchase Frequency Rate = 2

Average Customer Value per month = $120 * 2 = $240

Question 5

To find the LTV per customer for this demographic: LTV = Average Customer Value per month × Average Lifespan (in months)

Given:

Average Customer Value per month = $240
Average Lifespan = 5 years = 60 months

LTV = $240 * 60 = $14,400

Question 6

To find Average Purchase Value for Inu + Neko: Average Purchase Value = Total Revenue / Number of Purchases

Given:

Total Revenue = $30,000
Number of Purchases = 1500

Average Purchase Value = $30,000 / 1500 = $20

Question 7

To find Average Purchase Frequency Rate per month: Average Purchase Frequency Rate = Number of Purchases / Number of Customers

Given:

Number of Purchases = 1500
Number of Customers = 1000

Average Purchase Frequency Rate = 1500 / 1000 = 1.5

Question 8

To find Inu & Neko's Average Customer Value per month: Average Customer Value per month = Average Purchase Value × Average Purchase Frequency Rate

From previous questions:

Average Purchase Value = $20
Average Purchase Frequency Rate = 1.5

Average Customer Value per month = $20 * 1.5 = $30

Question 9

To find the LTV per customer for Inu + Neko: LTV = Average Customer Value per month × Average Lifespan (in months)

Given:

Average Customer Value per month = $30
Average Lifespan = 12 years = 12 * 12 = 144 months

LTV = $30 * 144 = $4320

Question 10

To find the customer LTV for small businesses: LTV = Average Purchase Value × Average Lifespan (in months)

Given:

Average Purchase Value = $2500
Number of Customers = 8 (Annual purchases per business, i.e., 1 subscription per year)
Average Lifespan = 10 years = 10 * 12 = 120 months

LTV per business = $2500 * 10 = $25,000.

Since there are 8 businesses: Total LTV = $25,000 * 8 = $200,000

Summary of Answers:

$3000
$120
2
$240
$14,400
$20
1.5
$30
$4320
$200,000