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Souhardya Banerjee

Saiyam Arora

FLOW OF PRESENTATION

1

• Managerial Problem is defined

2

• Computation of aggregate factors and factor Analysis

3

**• Regression Analysis with impact of linear/non-linear relationships on Key
**

Loyalty predictors

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• Take assumptions and validate for regression

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• “Best” predictive model for aggregate data is interpretted

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• Moderating affects of variables on best aggregate model

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• customer segments to loyalty predcitors implicaions

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• Recommendations for “Driving Loyalty Up”

Problem Statement • An insurance company facing stiff global competition chipping its loyal customer base • Tough business environment • Price competitiveness need to match customer needs for trusting relationships • To enhance the company’s competitive position in the customer’s mind • Company Seeking for “Driving Loyalty Up” Strategy .

Factor Analysis Trust Agent Satisfaction Trust Company ShortTerm value LongTerm Value Loyalty .

• Value_Longterm= (val4+val5+val6)/3. .Composites for Regression Analysis • • • • Beh_loyalty: (loy1+loy2+loy3+loy4)/4 Cog_loyalty : (loy5+loy6+loy7+loy8)/4 Satisfaction = (inter1 + inter2 + inter3)/3 Trust on Agent = (rep17+rep18+rep19+rep20)/4. • Trust on company =(prac17+prac18+prac19+prac20)/4. • Value_Shortterm = (val1+val2+val3)/3.

Value_LT • Hypothesis : – H0 : KLP’s (trust on agent. we accept the null hypothesis and reject otherwise . • If p value > 0. long term and short term value ) do not have a influence in driving up the loyalty loyalty. customer satisfaction. trust on company. customer satisfaction. long term and short term value ) have a influence in driving up the loyalty loyalty. trust on company.05 .Variable Setup in SPSS Statistics Outcome Variable : •Cog_loyalty ( for cognitive Loyalty) •Beh_Loyaltty(For behavioral Loyalty) Predictor Variable : Satisfaction Trust_agent Trust_Comp Value_ST. – H1: KLP’s (trust on agent.

F(5.Regression on Behavior Loyalty(Beh_Loyalty) KLP’s explain 55. the regression model is a good fit of the data .2% of the variablity on Beh_Loyalty The table shows that the independent variables statistically significantly predict the dependent variable.e. p < ..773) = 1095.0005 (i.

2% of main factors are influencing model." column that all independent variable coefficients are statistically significantly different from 0 (zero) Results • Adjusted R square change is 0. • It is significant as for p < 0.05 and hypothesis is rejected • Behavioural Loyalty is dependent on all the independent variables • The dependency is higher in satisfaction and long term value variable • VIF< 10 that satisfies that they are not multi-collinear.552 means 55. .Statistical significance of the independent variables From the "Sig.

Also std.Linear Normality Since median comes user +-2sigma mean. residual is zero at mean. Independent of Errors The linear curve shows that it is Independent . Thus it is normal Trends show that it is following a nearly a linear trial.

the regression model is a good fit of the data . F(5.0005 (i.912.762) = .Regression on Cognitive Loyalty(Cog_Loyalty) KLP’s explain 52.. p < .e.3% of the variablity on Beh_Loyalty The table shows that the independent variables statistically significantly predict the dependent variable.

3% of main factors are influencing • It is significant as for p < 0.523 means 52. .Results • Adjusted R square change is 0.05 and null hypothesis is rejected • Cognitive Loyalty is dependent on all the independent variables • The dependency is higher in short term value variable. • VIF< 10 that satisfies that they are not multi-collinear.

residual is zero at mean. Independent of Errors The linear curve shows that it is Independent . Thus it is normal Linear Trends shows that it is following a nearly a linear trial.Normality Since median comes user +-2sigma mean. Also std.

773) = . F(5.0005 (i.902.. p < . the regression model is a good fit of the data .Regression on Total Loyalty KLP’s explain 60% of the variablity on Beh_Loyalty The table shows that the independent variables statistically significantly predict the dependent variable.e.

• It is significant as for p < 0. .602 means 60.2% of main factors are influencing model.05 and hypothesis is rejected • Behavioural Loyalty is dependent on all the independent variables • The dependency is higher in satisfaction and long term value variable • VIF< 10 that satisfies that they are not multi-collinear.Results • Adjusted R square change is 0.

Also std. Independent of Errors The linear curve shows that it is Independent .Linear Normality Since median comes user +-2sigma mean. residual is zero at mean. Thus it is normal Trends show that it is following a nearly a linear trial.

Removing Outliers Outliers present in the model as COO Distance > 0.04 for some data points .

Therefore. it is appropriate to proceed with .Multicollinearity We have considered 0. it can be concluded that significant multicollinearity is not present between any of the independent variables.9 as the cut-off value. Since no correlation value is above or equal to 0.9.

600.5 .Multiple regression The Adjusted R square value is 0. This indicates that 60% variation in Loyalty which is the dependant variable is explained by the independent variables which we have considered. The model is converging well since significance is less than 0.

133*Satisfaction . Hence all of them are going to be part of the Multiple Regression Model.160*Value_Longterm + 0.123*Trust + 0.004 + 0.127*Agent + 0.135*Value_Shortterm + 0.Multiple regression All the Independent Variables have significance values <0. Based on the unstandardized coefficients of the IVs.05. following model is made – Loyalty = 0.

observing the coefficients tell us that a unit increase in Value_Longterm will contribute most to Dependent Variable Loyalty.Analysis – Aggregate Data • Based on the outcome of multiple regression. • This is followed by Value_Shortterm and Satisfaction. we can conclude that all independent variables has to be considered. which are closely followed by Agent and Trust . • Further.

Value_Shortterm. 23.537 df 5 Mean Square 84. Satisfaction. Satisfaction.896 Total 333 a. Agent.642 Residual 328 .158 203 Regression Residual Total a.631 198 1.05) in case of the data specific to a ntries. Predictors: (Constant).707 F 125. Dependent Variable: loyalty b.000b .000b Residual 159. Value_Shortterm.840 df Mean Square F Regression 5 100. Agent. Satisfaction.154 229. . Value_Shortterm.Multiple Regression Model significance observed that the models are significant (<0.127 Sig.005 111.677 Total 582. Value_Longterm Holland-specific data Model 1 Sig. Dependent Variable: loyalty b. Trust. Trust. Dependent Variable: loyalty b. Value_Longterm F Sig. Value_Longterm Germany-specific data Model 1 ANOVAa Sum of Squares 500.000b ANOVAa Sum of Squares 133.196 362. The US-specific data ANOVAa Model 1 Regression Sum of Squares 423.350 df Mean Square 5 26. Agent. Predictors: (Constant). Predictors: (Constant).625 240 a.027 293. Trust. .006 .088 235 .813 793.

.102 a Predictors: (Constant).642 5 328 .624 . F DurbinModel R R Square Square Estimate Change F Change df1 df2 Change Watson 1 .367 23. Value_Shortterm. Error Adjusted R of the R Square Sig. Dependent Variable: loyalty Holland Model Summaryb Change Statistics Std.1% variatio lty is explained by the IVs considered.4% in case of Germany. That value is 62.721 . is in case of the US. Dependent Variable: loyalty highest value of Adj. R sq. F DurbinModel R R Square Square Estimate Change F Change df1 df2 Change Watson 1 . Value_Shortterm.82278 .367 . however.e.000 1.000 2. value just 0. Predictors: (Constant). and.727 . Value_Longterm b.006 5 198 . Satisfaction.94645 . Agent.351 1.351. R sq.127 5 235 . Agent. i. Trust. Predictors: (Constant). Agent.630 .606a .630 111.170 a. which means there exist other t from the IVs considered who drive the customer loyalty. has the adj.836 a. Value_Longterm b. Value_Longterm b.727 125.07590 .000 2. Trust. F DurbinR R Square Square Estimate Change F Change df1 df2 Change Watson .794a . which is 0. Dependent Variable: loyalty Germany Model 1 Model Summaryb Change Statistics Std.Adjusted R Square The US Model Summaryb Change Statistics Std. Satisfaction. Trust.853a . 72.721. Satisfaction. Error Adjusted R of the R Square Sig. Value_Shortterm. Error Adjusted R of the R Square Sig.

031 .096*Value_Shortterm + 0. Therefore all of them need to be considered for the Multiple Regression Model.219 4.282 3.190 erm a.001 .115 2.838 .128 .303 .081*Satisfaction + 0. Based on the unstandardized coefficients of the IVs.165 .418 Agent .172 . Error .078 .044 .067 -.041 .128*Agent + 0.0% Confidence Interval for B Collinearity Statistics Lower Upper Sig.053 .007 .228 4.158*Trust + 0.081 .154 .421 95.312 + 0.007 .060 .121 . following model is made – oyalty = 0. Bound Bound Tolerance VIF .157 -.569 Value_Shortt .200 .216 .05.190*Value_Longterm .312 .745 (Constant) B Std.958 All the Independent Variables have significance values <0.131 1.231 3. Dependent Variable: loyalty .Multiple Regression Model The US Coefficientsa Standardi zed Unstandardized Coefficien Coefficients ts Model 1 Beta t 1.002 .158 .414 2.168 5.220 Satisfaction .543 Trust .037 .394 .185 2.341 .057 .884 .004 .256 .096 erm Value_longt .278 3.050 .

980 .185 1.228 -.049 .079 .332 . following model is made – oyalty = -0.120*Trust + 0.0% Confidence Interval for B Collinearity Statistics Lower Upper Sig.238 .626 .191 .053 Beta . Bound Bound Tolerance VIF .060 .211 .218 3.226 .825 l the Independent Variabless have significance values <0. Dependent Variable: loyalty .292 .Multiple Regression Model Germany Coefficientsa Standardi zed Unstandardized Coefficient Coefficients s Model 1 (Constant) Satisfaction Agent Trust B Std.064 .145 Value_Short .000 .137 2.083 t -1.255 .151 1.040 .232 4.184*Value_Shortterm + 0.255 + 0.239 4.05 except for the Agen est of them are going to be part of the Multiple Regression Model.168 .120 .006 .237 .226*Satisfaction + 0.120 .110 erm a.110*Value_Longterm .077 4.261 3.184 term Value_longt .207 95.001 .722 .000 .038 .213 .308 . ased on the unstandardized coefficients of the IVs.283 .282 -. Error -.084 .053 .051 .313 3.054 .195 .194 5.

Bound Bound Tolerance VIF .098 .230 .100 Coefficientsa Standardiz ed Coefficient s Beta t .082 .142 .335 .086 .098 .010 ortterm Value_lon .956 95.831 Value_Sh . Error .025 . ased on the unstandardized coefficients of the IVs.176 2.930 -.093 .096 .084 .669 1.415 Trust Only Agent and Value_Longterm are significant variables.236 .101 .463 .221 4.459 .089 . following model is made – oyalty = 0.009 . Dependent Variable: loyalty .112 .316 3.308 .011 .088 .280*Value_Longterm .266 .447 2.302 3.172*Agent + 0.091 .607 -.293 3. herefore only these two are going to be part of the Multiple Regression Model.517 .097 1.280 gterm a.172 .038 .340 -.308 -.238 .515 .293 .023 .003 .211 .0% Confidence Interval for B Collinearity Statistics Lower Upper Sig.Multiple Regression Model Holland Unstandardized Coefficients Model 1 B (Constant) Satisfactio n Agent Std.353 2.236 + 0.

Satisfaction has the most bearing on the Loyalty for every unit increase esults of multiple regression on the US-specific data indicates that customer loya ficantly dependent on all the Independent Variables under consideration. factors influencing customer loyalty varies from country to country . only Agent and Value_Longterm are significant. ermany.Analysis – Country-specific Data d on the coefficients obtained from Multiple Regression. Agent is not significant. ermany. olland. it is observed that a unit ase in Value_LongTerm contributes most to the dependent variable Loyalty in cas nd Holland.

Recommendations Company should implement good CRM programs to keep the customer base satisfied because Satisfaction and long term value are the major factor significant in driving up the Loyalty More long term insurance policies to generate high Long term value from Customers should be included .

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