Question

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?

Answer 1

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.