Below is data that is similar to the Starbucks Case you utilized in discussion section. The key variables that have changed is length of relationship, and increase in frequency of visit post implementing the rewards program.
Pre- Rewards Post- Rewards
Average Spend/Visit $5.90 $5.95
Cost of Goods 25% 25%
Average Frequency of 4.2 Times 4.3 Times
Visits/Week
Cost of Rewards 9.5% point
Program redemption costs,
plus .5 administration,
total 10%
Duration of Relationship 20 years 20 years

What is the CLV of a typical Starbucks customer the Pre-Rewards? (Round to nearest dollar)
a) $ 6443
b) $ 19,328
c) $ $4604
d) $ 25,771
e) $ 24,133