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Lecture 8

CCT224H5 Lecture Notes - Lecture 8: Customer Retention, Churn Rate, Spotify

Communication, Culture and Technology
Course Code
Sam Dumcum

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Week 8 Customers
What are customers?
Customer is an individual or business that purchases the goods or services
produced by a business
Attracting customers is the primary goal of most public-facing businesses,
because it is the customer who creates demand for goods and services
Customer Lifetime Value (CLV)
The monetization you receive from a customer over the time they shop with you
Rewards systems
o Starbucks app
o 7/11 app
o Cineplex (Scene member rewards)
Customer Cost of Acquisition
Disruption (reduced product cost)
Marketing (specifically targeting new customers)
Multiple product lines (R&D, etc)
Customer Intimacy
Providing a unique range of customer services to personalize service and
customize products to meet differing needs
3 important questions for Software as a Service (SaaS)
How much do paying customers spend throughout their lifecycle?
o (Revenue per paying user per month * gross margin) / churn
o What is churn rate?
Rate of attrition
% of subscribers of a service who discontinue their subscriptions to
that service within a given time period
For a company to expand tis clientele, its growth rate, as measured
by the number of new customers, must exceed its churn rate
Generally expressed as a percentage
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