Case Study - Indomart

Client Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Total Sales
ID 19 19 19 19 19 19 19 19 19 19 19 19 in Lakhs
C1 1989 976     897 482 1898   1353 999     8594
C2 753 931 484 903 1148 1007   50 332 701   909 7218
C3 266 188 1565 934   284 342   649 1304 1605   7137
C4 962 1408 1551 1252   156   1636 200 1015     8180
C5 1631 1366 191 1355 1487 334   0 1285 1707     9356
C6 1560   1635 1111 1607 758   793 1055 439 663   9621
C7 1079 1201 1352 1476 1785 1155 1265   1251 839     11403
C8 1189 1999 848 1985 1985 1899 1530           11435
C9     962 980       121 613 617 807 732 4832
C10 714 1600 1985         857   1122   632 6910
C11 572 662 145 141 816 289 1522 544 1485       6176
C12 452 234 405 415 121 175   273 564 457 132   3228
C13 1789       581 89 1176 1654 106 444   1106 6945
C14 1985 1894 1385 1785 1591 1944 1897           12481
C15   1114 238 1153 171   1062 680 486   1652   6556
C16 963 69 1524 1760 203 361 661 1263 1200 553   1183 9740
C17   323   1374 947 613   984 1560 1542 445   7788
C18 497 760 123     156   142   243 1119 774 3814
C19   1384     466     491 226 749 211 121 3648
C20 1897 1987 1866 1989 1986               9725
C21               1898 978 775 780   4431
C22                 2911       2911
C23                     1452 792 2244
C24           1523 41 468 323 160 1555   4070
C25   755 758 852                 2365
C26     773 299 901   1430 427   429 256 321 4836
C27               1897 1989 1999     5885
C28 2566 2411                     4977

The table above shows the monthly sales data of a B2B company - Indomart. Rows in the table show the purchases
done by each client on monthly basis. Blanks in the data shows that no purchase made by the client in that particular
period or month. For example, row 3 of the table represents the purchases made by client-C2 over a period of 12
months from Jan-2019 to Dec 2019 and this client did not make any purchase in the month of July and Nov.

Indomart is launching a new range of products in few segments under their most trusted brand. The company wants to
send a catalog and free samples for the upcoming inaugural trade fair of this new range. Indomart is considering
sending these catalogs and free samples to only 25% of the best consumers. Indomart is taking the help of its marketing
analytics division to figure out who are its best customers so that this investment of sending catalogs and free samples
should result in maximum return on investment.

Q1: How will Indomart identify the best customers?

a) What factors should be considered to rank all the clients mentioned in the above list from C1 to C28? Rank 1 for
a client signifies that this customer is most likely to respond to the promotional campaign by Indomart and
would come for the trade fair and more likely to place order.
b) Develop a mechanism to provide a unique score to each client which will help in preparing ranks. How would
you test that above metric is correct or not in meeting its objective? Develop a procedure to test its
effectiveness.

Q2. Will higher rank customers in the above metric necessarily have higher CLV? What are the limitations of the method
developed? Can the same ranks apply to all types of industries or some modifications are required?