Reference no: EM133100781

Read the Customer Loyalty Case Study. Formulate the problem: state the business problem/opportunity, specify business objective(s), and specify business question(s).

Case Study:

This case study concerns a retailer's loyalty program. The retailer focuses on service delivery, but also sells products related to that service and has a loyalty program implemented through a mobile app. The retailer wants to offer manufacturers access to joint customers through the mobile app but needs evidence of its effectiveness in order to negotiate fees. To gather this evidence, the retailers conducted a field study in which half of its loyalty members are randomly selected to receive manufacturer incentives and the others do not.

The data set includes the following variables:

1. Age: customer age in years.

2. Income: annual income in $1,000 (provided from a third-party vendor).

3. Visits: number of store visits in the last 12 months.

4. Tenure: the number of months the customer has been in the loyalty program.

5. Service Spend: gross total spending on the service in the last 12 months.

6. Product Spend: gross total spending on the product in the last 12 months.

7. Incentives: price discounts and free products used in the last 12 months. And the variables related to the field study are:

8. Manufacturer Promo: an indicator for being in the treatment group.

9. Use Promo: an indicator for using manufacturer incentives if in the treatment group.

10. Pre-Visits: number of visits during the three months before the study starts.

11. Post-Visits: number of visits during the three months after the study starts.

12. Pre-Service Spend: spending on services during the three months before the study starts.

13. Pre-Product Spend: spending on products during the three months before the study  starts.

14. Post-Services Spend: spending on services during the three months after the study starts.

15. Post-Product Spend: spending on products during the three months after the study starts.