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Topic: English
Number of pages / Number of words: 3 / 733
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Viene adjunto en el mail.

Problem 8:

With contract( 12% annually

2,000,000*.12%= 240,000 customers (A)

Cost with contract to recover the churn:

240,000*$400= $96millions

Cost without contract to recover the churn:

1,040,000*$400= $416millions

Difference in cost between contract and without contract= $320 million(B)

MM= 60-30= $30

BE= 400/30= 13 months ( C)

D) To make contract, I would suggest making them for more than 13 months long...


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Another very important thing is that if you don’t apply contracts to your customers your churn % will be a lot higher and you will need to invest a lot more money to recover the same number of customers that will be: $416 millions, and the difference is that if you maintain your customers under contracts and longer than 13 months, you will have recover your investment and your churn % will be very low as well as your acquisition cost for the customers you have lost...


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