Customer Lifetime Value (CLV) - Husk Inc.

Husk Inc. is Iowa's leading manufacturer of corn-related novelties and paraphernalia. The main focus of Husk Inc. is their Colonel Kernel action doll. It sells on average 7,000 units per retailer a year and Husk expects to sell the product to retailers at $6 per unit. The manufacturing and distribution cost per unit for Husk is $2.50.

In order to promote customer loyalty, Husk often sends out large samples of premium corn to potential and loyal business customers. Although Husk solicits 30 companies per year with samples, only one out of ten choose to open an account with Husk. Starting the year after acquisition, Husk rewards all first year companies that make a 2nd-year purchase with 3 additional samples over the course of the 2nd year.

Assume that each sample of premium corn costs Husk $700 to produce and deliver and that 14% of retailers stop selling Colonel Kernel after the first year.

What is the 2-year undiscounted lifetime value of the customer for Husk?