Homework SourseIn a recently published study a telecommunications company t
In a recently published study, a telecommunications company tested four win-back offers with 40,000 customers, looking not only at which offer lured back the most customers, but also at which one was the most profitable. The results were as follows:
Strategy
Per-Person Cost
Success rate
ROI
DISCOUNT OFFER: $20 off for 6 months
$120
45%
668%
UPGRADE OFFER: A $35 movie channel free for 3 months
$105
41%
793%
BUNDLED OFFER: $20 off for 6 months, plus a $35 movie channel free for 3 months
$225
47%
302%
TAILORED OFFER: Customers who left over price get the discount
$120
45%
596%
Customers who left over service get the upgrade
$105
b) Which win-back strategy is the most profitable?
| Strategy | Per-Person Cost | Success rate | ROI |
| DISCOUNT OFFER: $20 off for 6 months | $120 | 45% | 668% |
| UPGRADE OFFER: A $35 movie channel free for 3 months | $105 | 41% | 793% |
| BUNDLED OFFER: $20 off for 6 months, plus a $35 movie channel free for 3 months | $225 | 47% | 302% |
| TAILORED OFFER: Customers who left over price get the discount | $120 | 45% | 596% |
| Customers who left over service get the upgrade | $105 |
Solution
Which one was the most profitable?
The offer with the highest return on Investment (ROI) was the most profitable.
From the table we can see that \"UPGRADE OFFER: A $35 movie channel free for 3 months\" has the highest ROI at 793% and hence this option is the most profitable.
Although \"BUNDLED OFFER: $20 off for 6 months, plus a $35 movie channel free for 3 months\" has the highest success rate of 47%, in terms profitability, we cannot say that this one is the best.
