Question

A marketer for a new cloud technology offers two levels of service, one priced at $ 300/month and another at $ 50/month. The marketer offers free webinars to generate leads, and the firm figures that 5% of the attendees will sign up for the $300 service, 15% for the $50 service, and 80% will not sign up for anything.

Calculate and interpret the expected value of a webinar attendee.

Answer 1

Based on the information :

Sign up	x	P(x)	x* P(x)
300/month	300	0.0500	15.0000
50/month	50	0.1500	7.5000
no sign up	0	0.8000	0.0000
Total	Total	1.000	22.500

Expected value = 300 * 0.05 + 50 * 0.15 + 0* 0.80 = 22.50

Expected value = 22.50

For each webinar attendee the execpted amount which can ge genereated on an average is 22.50 $