MHR 322 CORE REVIEWS ANSWERS AND
QUESTIONS SET A+
✔✔lifetime value is important because it tells you: - ✔✔how much total profit(value) you
can expect from a particular customer which tells you how much you can spend to
acquire that customer
✔✔what is contribution margin per unit for the following example:
dr. bock's book on business models is priced at $25
total cost to produce the books is $20
the variable cost to produce the book is $10 - ✔✔$15
✔✔coca, also known as cac, is best defined as - ✔✔the total sales and marketing cost
required to earn a new customer
✔✔what is the lifetime value at dano.com? - ✔✔$100
✔✔identify ltv based on the following info:
price/month: $500
cost/month: $100
average tenant use: 25 months - ✔✔$10,000
✔✔the basic equation for breakeven analysis is: - ✔✔breakeven quantity = fixed costs /
(sales price per unit - variable cost per unit)
✔✔you have invented a new treatment for sick cows that will save farmers
$1000/treatment. the cost of producing each treatment is $20. assume you are following
a 'value-based pricing' strategy. which of the following is your best pricing option for
maximizing your profits? - ✔✔$300
, ✔✔assume you have complete a coca/ltv analysis for your startup. you have found that
your coca is greater than the ltv of a customer. based on this finding, what should you
focus on? - ✔✔decreasing the cost of customer acquisition
✔✔calculate the coca based on the following info:
total sales/marketing budget: $1,000
sales/marketing associated w bringing in more customers: $500
number of new customers acquired: 5 - ✔✔$100
✔✔t/f: pricing should be based primarily on the value your customer gets rather than the
cost to produce the product or service. - ✔✔true
✔✔t/f: its always easier to raise prices than lower prices. - ✔✔false
✔✔t/f: be flexible on pricing for early tester and "lighthouse customers" because you can
use them as case examples to help sell other customers. - ✔✔true
✔✔you should be able to identify likely price points that would work for your customers
by: - ✔✔combining the information you have about your customers budget process and
purchasing authority
✔✔t/f: different types of customers will pay different amounts for the same products or
services depending on how early or late they are buying compared to other customers -
✔✔true
✔✔t/f: calculating coca also include the cost of trying to sell customers who ultimately
chose not to buy the product or service - ✔✔true
✔✔t/f: mapping your sales process requires matching specific sales activities at each
stage (short term, medium term, and long term) with the specific type of customer (or
segment) your expect to reach with that activity - ✔✔true
✔✔t/f: the primary goal of your short term sales process is to create demand for your
product and fulfill those orders. - ✔✔true
✔✔t/f: ultimately, the goal of any new venture is to have average cost of customer
acquisition be higher than the lifetime value of the average customer - ✔✔false
✔✔all of the following are good ways to reduce coca except: - ✔✔target the largest
customer segments first to reduce the effective cost on a per customer basis
✔✔t/f: an angel is a wealthy individual who is investing his/her own money. - ✔✔true
QUESTIONS SET A+
✔✔lifetime value is important because it tells you: - ✔✔how much total profit(value) you
can expect from a particular customer which tells you how much you can spend to
acquire that customer
✔✔what is contribution margin per unit for the following example:
dr. bock's book on business models is priced at $25
total cost to produce the books is $20
the variable cost to produce the book is $10 - ✔✔$15
✔✔coca, also known as cac, is best defined as - ✔✔the total sales and marketing cost
required to earn a new customer
✔✔what is the lifetime value at dano.com? - ✔✔$100
✔✔identify ltv based on the following info:
price/month: $500
cost/month: $100
average tenant use: 25 months - ✔✔$10,000
✔✔the basic equation for breakeven analysis is: - ✔✔breakeven quantity = fixed costs /
(sales price per unit - variable cost per unit)
✔✔you have invented a new treatment for sick cows that will save farmers
$1000/treatment. the cost of producing each treatment is $20. assume you are following
a 'value-based pricing' strategy. which of the following is your best pricing option for
maximizing your profits? - ✔✔$300
, ✔✔assume you have complete a coca/ltv analysis for your startup. you have found that
your coca is greater than the ltv of a customer. based on this finding, what should you
focus on? - ✔✔decreasing the cost of customer acquisition
✔✔calculate the coca based on the following info:
total sales/marketing budget: $1,000
sales/marketing associated w bringing in more customers: $500
number of new customers acquired: 5 - ✔✔$100
✔✔t/f: pricing should be based primarily on the value your customer gets rather than the
cost to produce the product or service. - ✔✔true
✔✔t/f: its always easier to raise prices than lower prices. - ✔✔false
✔✔t/f: be flexible on pricing for early tester and "lighthouse customers" because you can
use them as case examples to help sell other customers. - ✔✔true
✔✔you should be able to identify likely price points that would work for your customers
by: - ✔✔combining the information you have about your customers budget process and
purchasing authority
✔✔t/f: different types of customers will pay different amounts for the same products or
services depending on how early or late they are buying compared to other customers -
✔✔true
✔✔t/f: calculating coca also include the cost of trying to sell customers who ultimately
chose not to buy the product or service - ✔✔true
✔✔t/f: mapping your sales process requires matching specific sales activities at each
stage (short term, medium term, and long term) with the specific type of customer (or
segment) your expect to reach with that activity - ✔✔true
✔✔t/f: the primary goal of your short term sales process is to create demand for your
product and fulfill those orders. - ✔✔true
✔✔t/f: ultimately, the goal of any new venture is to have average cost of customer
acquisition be higher than the lifetime value of the average customer - ✔✔false
✔✔all of the following are good ways to reduce coca except: - ✔✔target the largest
customer segments first to reduce the effective cost on a per customer basis
✔✔t/f: an angel is a wealthy individual who is investing his/her own money. - ✔✔true
