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    Question

    If customer acquisition cost keeps rising while

    retention remains constant, long-term profitability will depend mainly on:
    A Market penetration Correct Answer Incorrect Answer
    B CLV growth Correct Answer Incorrect Answer
    C Advertising volume Correct Answer Incorrect Answer
    D Branch expansion Correct Answer Incorrect Answer
    E Logo redesign Correct Answer Incorrect Answer

    Solution

    Higher lifetime value offsets rising acquisition costs. Why others are incorrect: Penetration increases share but not necessarily profit; Advertising increases cost; Branch expansion costly; Logo redesign cosmetic. Banking Example: Increasing cross-sell to raise lifetime revenue.

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