IS Group Assignment

Group 7

Data Analysis and decision making : case study of re-accommodating

passengers for an airline company

Abhiraj Anand - PGP/25/127

Anusha Goel - PGP/25/137
Aditya Iyenger – PhD/15/17/O
Navya Mohanka PGP/25/157
Shubham Hemane PGP/25/147
Shubhikhsha Thamodharan PGP/25/177
 Q.1) Whether Bob should be spending $10M to retain its value customers or to
acquire new customers?

Passenger Lifetime Years Avg revenue CLV@20% CLV@19% % $ change in YTD Profitabil Freque
Revenue per year change CLV ity ncy
Jennie 198000 20 9900 39600 41250 4% 1650 2500 Low Up
Tom 130000 5 26000 104000 108333.33 4% 4333.33333 7090 Med Same
33 3
Michael 5500 1 5500 22000 22916.666 4% 916.666666 0 High
67 7
Danny 55000 7 7857.142857 31428.571 32738.095 4% 1309.52381 0 Med Down
43 24
Ben 2900 1 2900 11600 12083.333 4% 483.333333 0 Med
33 3
Joe 15000 4 3750 15000 15625 4% 625 6250 Low Up
Jane 60000 4 15000 60000 62500 4% 2500 9500 High Up
Average 66629 6 10130 40518 42207 4% 1688

Investment Per customer total CLV avg Per customer gain

acquisition customers
cost
New 10000000 750 13333 2000 1250
customers

With a $10 million budget, the company can acquire approximately 13,000
new customers. If the average CLV is $2,000, the company can expect a return
of around $1,250 per customer. To retain their current customers and reduce
attrition by 1% they will gain $1688 per customer therefore it is better to
spend the money on retaining their existing customers since they will see more
of return per customer.
Q.2) Which of the two passengers should get top priority in re-booking?

Jane – She was an influential politician and could directly impact Thailand’s
tourism. She has the 2nd highest CLV and has a high profit score. She helped
generate $9500 yearly revenue which is the highest amongst other passengers.
Her travel frequency has increased over the years and has travelled 1,60,000
miles.

Danny – He is a famous blogger and has a blog named “Travel More with Less”
who has 3 connecting flights from the airlines. Danny’s blog had an affiliated
link to the Thai ABC Airlines and he talked about the airline services and
promotions in his blog, the number of clicks through the affiliated link would
increase business and help spread a positive word about the company amongst
travellers. He is highly followed on twitter and has the power to create huge
impact. He had earned a gold status when he reached 50000 miles in 2014 and
has a moderately high CLV.

Michael and Ben have a YTD of 0. Joe has a low profitability. Since he has plans
for future travel, he would probably not mind taking travel miles for the delay.
Jennie despite having been a frequent flyer in the past, her travel patterns
have now changed and she doesn’t travel as frequently. Ben was a famous
singer and was a first time traveller. Even though she is a famous singer, we’ll
have to reward our loyal customers.