Netflix Has One of the Highest Customer Loyalty Ratings in the Entertainment

question 142

Multiple Choice

Netflix has one of the highest customer loyalty ratings in the entertainment industry with approximately 74% of current subscribers continuing to renew their subscription with Netflix on a month-to-month basis. In addition, many customers have cancelled their cable or satellite subscriptions and rely almost exclusively on streaming services such as Netflix for their entertainment. Netflix offers three different payment options or plans for customers-the basic plan at $7.99 per month, standard plan at $8.99 per month, or a premium plan at $11.99 per month. Thus, subscribers who renew on a monthly basis would pay between $95.88 and $143.88 per year to continue their Netflix service. If 74% of subscribers continue their service on an annual basis, Netflix is able to build a stable revenue stream based on repeat purchasers. A quick snapshot of one customer revealed that the customer had subscribed to the Premium plan for five years and generated over $700 in revenue to Netflix. Which of the following marketing terms best captures the importance of customer loyalty and its impact on Netflix?

• A) customer impact score
• B) customer retail calculation
• C) customer lifetime value
• D) customer profitability value

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Definitions:

Lithium

A chemical element used as a medication to treat mood disorders, particularly bipolar disorder, by stabilizing mood.

Clozapine

An antipsychotic medication used in the treatment of schizophrenia, particularly effective for patients who do not respond to other treatments.

Schizophrenia

A mental disorder characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior.

Alzheimer's Disease

A progressive neurological disorder that leads to memory loss, cognitive decline, and eventually the inability to carry out simple tasks.