Contemporary Selling Study Guide Bonus Sales Math Dr. Carlos Valdez Integrated Business Program College of Business Administration University of Central Florida

Gross profit margin Formula= sales price – cost of good Sales price Calculate the gross profit margin for the following smart phones sold at a local store. iPhone, sales price $600 and cost of good $200. Samsung Galaxy price $590 and cost of good $160

Profit Sales or revenue Revenue-costs= Profit If in the month of March, they sold 6 iPhones and 5 Samsung Galaxy in which type of phone they made more profits?

Cost per Acquisition Formula= Average revenue per customer = yearly revenue/yearly customer count What was the average revenue per customer for the month of March? And if you going to assign 10% of the average revenue per customer for covering the cost per acquisition, then how much money can you assign to bring one customer?

Basic Customer Lifetime Value Formula CLV = m * L – AC m= contribution margin generated from a customer in a year L= expected purchasing life of a customer AC= up-front cost of acquiring a customer Calculate the CLV for a high-end customer that will stay for three years and will bring a profit of $650 per year. Use the same acquisition cost calculated on the previous problem.

Retention Churn rate= percentage of existing customers who stop purchasing your product, often measured in a year. What is the retention rate and churn rate for the business if in the month of April, 7 March customers return to the store to buy a product or service?

Answers GPM: iPhone: 67% and Samsung 73% Profit: iPhone $2,400 and Samsung $2,150 Revenue per customer: $595 and CPA:$59.54 CLV: $1,890.46 Retention rate: 64% and Churn rate:36%

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