Convergys Case: economic value (EV) factors and relationship value (RV) factors, homework help

Excel and Convergys Case attached.

Assignment Objectives

• To recognize that not all customers are created equal
• To determine how to use both quantitative and qualitative data to assess which customers are most valuable to a firm
• To assess how to handle different customers strategically

Convergys Case:

One of the most important issues associated with customers in
services and business-to-business marketing is determining which
customers are most valuable to a firm. This is critical because
companies providing services have limited resources and cannot offer the
same degree of services to all customers. Convergys is a
business-to-business company that is exploring alternative ways to
identify its best customers for growing the business. In addition to
information in the case, you are given data in spreadsheet form about
economic value (EV) factors and relationship value (RV) factors. Your
task is to develop a composite scoring rule that takes the relevant
factors into consideration in order to prioritize your best customers
for growing the business. Do not use just the rule proposed by Carlson;
instead develop your own rule and then answer the questions that are
itemized below to decide which customers will generate the most growth
for the business. Your paper on this case should be five pages (1.5
spaced) plus an Excel spreadsheet showing your solution.

Questions to Answer

1. Identify and justify the metrics in the database that you believe
   should be incorporated into an overall composite measure to score
   customers. Describe the scoring rule that you prefer the most and
   compute the scores for each customer in the database according to that
   scoring rule. (When combining different items to develop a
   composite score, it is important to ensure that the scales of
   measurement for different variables do not influence the final score.
   Scale-neutral metrics can be developed by standardizing the variables
   where necessary.)
2. Lento and his team are exploring alternative ways to identify the
   best customers for growing the business. Here are the alternative
   selection rules under consideration (ignore “A” customers from any
   analysis you do because those customers are managed through a separate
   process involving senior executives of Convergys):
   • Focus on the top 25% of “B” customers and the top 10% of the “C”
     customers according to their computed scores. (This will result in the
     selection of 14 “B” and 28 “C” customers for a total of 42 customers.)
   • Rank order the entire database according to the scoring rule, and select the top 42 customers.
   • Identify distinct segments of customers based on their EV and RV
     scores, and select one or more segments of customers that you think
     Convergys should target. (To maintain comparability with the other
     methods, restrict to 42 customers by selecting only those customers
     within selected segments that have the highest scores.)
   • Select 42 customers who have the highest customer scores and also have higher-than-average scores on both EV and RV.
3. Which one(s), if any, of the above selection rules would be most
   effective in identifying the appropriate set of customers for growing
   the business? Why? Justify your answer.
4. Based on your analysis in question 3, identify the top 25% of
   customers that you would recommend for the primary marketing efforts.
   Explain your rationale for selecting these customers. Within this select
   set of top customers, how would you further prioritize these customers
   based on their strategic value to Convergys?
5. Recommend an action plan for Convergys to help it increase revenue from the customers you identified in questions 3 and 4.