RSM 222 Group Assignment (Winter 2014)

Pilgrim Bank (A): Customer Profitability Pilgrim Bank (A) is a case that analyzes customer profitability in a retail banking setting. It explores a business phenomenon common to the retail banking industry and, within this context, acquaints you with the types of managerial questions that can be made by data analysis. As a recently hired analyst, Alan Green (your groups role) has data on a sample of customers and must make recommendations about whether the bank should charge fees or offer rebates for use of the online channel. The data consist of customer-level information on demographics, online channel use, and profitability. The dataset is now available for downloading on our course blackboard website. The first worksheet is Definition of Variables and the second worksheet is the dataset. Link to purchase Pilgrim Bank Case: https://cb.hbsp.harvard.edu:443/cbmp/access/25928453 Requirements: Write a business report summarizing your analysis and findings. The report should include the answers to the following assigned questions, which are useful when Alan Green (or your group) meets with Ravi Raman next Monday morning. Remember to support/justify your answers. 1. How do retail banks make money from their customers? How much variation is there in profit across customers? Based on this, what do you recommend the bank do in terms of matching service levels to customer profit levels? 2. Based on the sample of customer data for 1999, what can you conclude about average customer profitability for pilgrim Banks entire customer population? 3. Is the difference in average profitability between online and offline customers in the sample indicative of a meaningful difference in probability across these groups for Pilgrim Banks entire customer population? 4. What role does customer demographics play in analyzing customer profitability for online and offline customers?

5. What is your recommendation to the senior management team in terms of Pilgrim Banks online channel pricing strategy? Should the bank charge fees, offer rebates, or do nothing in regards to pricing for online channel use?

As always, be careful when making recommendations to the senior management team. You should provide enough explanations/justifications with data analysis (statistic tests). The main text of your report should NOT be longer than SIX pages (double-spaced, 1-1.5 inch margins, Times New Roman 12 pt font). You can provide some results of your data analysis in appendix which will not count toward the maximum page length.

Please have ONE member of your group submit the assignment to both Blackboard and to turnitin.com (course ID: 7434367; enrollment password: winter2014) by Friday April 4 at 11:00pm. Remember to include the group cover page with your submission. Please see information posted on Blackboard for detailed submission instructions.