Initial Fixed Costs Response 7,953Name Cost $ 0.10 Resp Rate2.3%Catalogue $ 0.75 List 345,783 $ 0.85CPO $ 36.96

LT $50 (Assuming Lapsed Customers) InitialNext < $50Order12 months24 months36 months48 months60 months Time period Number of active customers Annual survival rate87%47%51%96%88% Cumulative survival rate 87%41%21%20%18% Average # of orders** Average Purchase $ $ $ $ $ $ Total sales $ 148,279 $ 152,139 $ 109,129 $ 71,419 $ 68,788 $ 58,618 Gross Profit $ 62,277 $ 63,898 $ 45,834 $ 29,996 $ 28,891 $ 24,619 Fixed costs* $ 172,107 $ 24,276 $ 11,508 $ 5,820 $ 5,562 $ 4,920 Net profit -$ 109,829 $ 39,622 $ 34,326 $ 24,176 $ 23,329 $ 19,699 Discount rate PV -$ 109,829 $ 36,020 $ 28,369 $ 18,164 $ 15,934 $ 12,232 Cumulative NPV-$ 109,829-$ 73,809-$ 45,440-$ 27,277-$ 11,343 $ 889 CLV -$ $ $ 9.76-$ 5.86-$ 2.44 $ 0.19

GT $50 (Assuming Lapsed Customers) > $50InitialNext Order12 months24 months36 months48 months60 months Time period Number of active customers Annual survival rate 87%57%52%88%82% Cumulative survival rate 87%50%26%23%19% Average # of orders** Average Purchase $ $ $ $ $ $ Total sales $ 314,933 $ 334,213 $ 182,311 $ 89,091 $ 71,684 $ 65,504 Gross Profit $ 132,272 $ 140,369 $ 76,571 $ 37,418 $ 30,107 $ 27,512 Fixed costs* $ 121,809 $ 17,250 $ 9,918 $ 5,196 $ 4,566 $ 3,738 Net profit $ 10,463 $ 123,119 $ 66,653 $ 32,222 $ 25,541 $ 23,774 Discount rate PV $ 10,463 $ 111,927 $ 55,085 $ 24,209 $ 17,445 $ 14,761 Cumulative NPV $ 10,463 $ 122,390 $ 177,475 $ 201,684 $ 219,129 $ 233,890 CLV $ 3.17 $ $ $ $ $ 70.96

CLV (Assuming Lapsed Customers)

LT $50 (Assuming Original Customer Cohort) InitialNext < $50Order12 months24 months36 months48 months60 months Time period Number of active customers Annual survival rate87%47%51%96%88% Cumulative survival rate 87%41%21%20%18% Average # of orders** Average Purchase $ $ $ $ $ $ Total sales $ 148,279 $ 152,139 $ 109,129 $ 71,419 $ 68,788 $ 58,618 Gross Profit $ 62,277 $ 63,898 $ 45,834 $ 29,996 $ 28,891 $ 24,619 Fixed costs* $ 172,107 $ 27,942 Net profit -$ 109,829 $ 35,956 $ 17,892 $ 2,054 $ 949-$ 3,323 Discount rate PV -$ 109,829 $ 32,687 $ 14,787 $ 1,543 $ 648-$ 2,063 Cumulative NPV-$ 109,829-$ 77,142-$ 62,355-$ 60,812-$ 60,163-$ 62,227 CLV -$ $ $ $ $ $ 13.36

GT $50 (Assuming Original Customer Cohort) > $50InitialNext Order12 months24 months36 months48 months60 months Time period Number of active customers Annual survival rate 87%57%52%88%82% Cumulative survival rate 87%50%26%23%19% Average # of orders** Average Purchase $ $ $ $ $ $ Total sales $ 314,933 $ 334,213 $ 182,311 $ 89,091 $ 71,684 $ 65,504 Gross Profit $ 132,272 $ 140,369 $ 76,571 $ 37,418 $ 30,107 $ 27,512 Fixed costs* $ 121,809 $ 19,776 Net profit $ 10,463 $ 120,593 $ 56,795 $ 17,642 $ 10,331 $ 7,736 Discount rate PV $ 10,463 $ 109,630 $ 46,938 $ 13,255 $ 7,056 $ 4,803 Cumulative NPV $ 10,463 $ 120,093 $ 167,031 $ 180,286 $ 187,343 $ 192,146 CLV $ 3.17 $ $ $ $ $ 58.30

CLV (Assuming Original Customer Cohort)

R F M – Retention – Order – Value 3 or 5 years horizon? When to clean up the file What to do with those LT50? 42% GM?