CASE EXAMPLE

Our client is a leading UK mobile phone network operator Interviewee Question/Response

with slowing revenue growth and falling profits. They want
our help to increase the profitability of their core business
(ie phone calls and SMS) in the UK. On which factors do
you think they should focus?
Interviewee Question/Response
Ask clarifying questions if necessary
“Do we want to focus only on phone calls and SMS - is
exploring new revenue streams part of the case?”
Interviewer’s Thoughts and Responses
Candidate is ensuring he/she understands case and
asking for clarification before answering question
“Yes, that is a good point but the client only wants us to
focus on phone and SMS revenues. Also consider that the
case is UK specific.”
Exhibit 1: UK Mobile Phone Market
Take some time to digest the information and come up
with some quick hypotheses
“Increasing profitability means increasing revenue and/
or decreasing costs. Some things I’d like to look into are:
◊ Growing the number of customers
◊ Increasing the amount each customer spends
◊ Reducing costs”
Interviewer’s Thoughts and Responses
Structures the problem. A good start with some clear
hypotheses but could go into a little more depth
“OK. We have some basic market data in Exhibit 1.
Have a look – does this change your thinking?”
Interviewee Question/Response
“It seems the number of active users is flattening off, but
only two thirds of the 60m people in the UK are active users.
So the client could try to win non-users as customers or
poach customers from other networks.”

Active Users (M) Interviewer’s Thoughts and Responses

Shows creativity in thinking about the problem.
37 37 38
40 36 36 Identifies two sources of new customers.
34 35
32 “Good point. I can tell you that there’s little room to cut
costs and winning non-users has proved tough. So let’s
26 take this idea of poaching customers forward.”
Pre-paid
20 25 25 25 26 Interviewer is steering conversation towards one
17 23 24
12 particular hypothesis. If this happens, go with it!
20
15 “Where would you start with this idea?”
9 4
2 14 15 Subscription
11 14 12 12 12 12 12
12
7

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

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 CASE EXAMPLE

Interviewee Question/Response Interviewer’s Thoughts and Responses

Feel free to take some time to think about this – you “Good. So to get to profitability by customer type you’re
don’t need to jump in straight away! assuming each customer type costs the same to serve,
“The client could do a number of things including: which is a fair assumption.”
◊ Reducing pricing to get more customers Candidate made this implicit assumption – a strong
◊ Better marketing and advertising” candidate would point this out
“Can you rank how profitable these customer types are?”
Interviewer’s Thoughts and Responses
“That sounds logical and the client is keen to do both. Do Interviewee Question/Response
you think there are differences between customers which “Yes, that’s the assumption. Give me a moment.”
need to be thought about?” Divide revenue contribution by client customers by
segment to get revenue per customer. Explain your
Interviewee Question/Response answer (shown on next page).
“The client should target the most profitable customers. One
place to start might be looking at pre-paid vs subscription Interviewer’s Thoughts and Responses
customers. Do we know anything about the profitability of Demonstrates rigour in analysis
these customers?” “Good. So you now know how profitable these customer
types are. What should the client do then?”
Interviewer’s Thoughts and Responses
Shows business judgement. Excellent. Honed in on the key Exhibit 2: Subscription Customer Segmentation
issue of profitability of different customer types
“Great. Pre-paid customers are on the average less profitable
than subscription customers. Have a look at Exhibit 2 which Average Market Client Revenue Customers
Age in Share by Customers by Contribution Leaving Each
shows different subscription customer types for the client. Customer Segments Segment Segment in % Segment in % by Segment in % Year in %
We call these ‘segments’. Can you tell anything about the
Older Sleepers 50 20 25 25 20
profitability of different types of customers here?”
Hyperactives 35 5 10 30 20

Interviewee Question/Response Incomers 45 10 10 10 20

Take a moment to look at this carefully
Moderns 35 30 30 15 30
“Yes – there’s a column with revenue contribution from the
client segment and also segment share for client. That tells Careful 40 15 15 5 30
you how much revenue you get from a typical customer in
Young Movers 22 20 10 15 50
each segment.”
39 100 100 100 28

Total Customers – 12M 4M £1.5Bn

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 CASE EXAMPLE

Interviewee Question/Response
“Go aer the most profitable customers – Hyperactives and
Young Movers are the top two.”
Interviewer’s Thoughts and Responses
Able to digest the information to prioritise the customer
segments. A strong candidate would also have
proactively considered the differences in retention
between customer segments.
“This sounds fair. We had some information earlier in
Exhibit 2. Can you use that to recommend what the client
could do to go aer these customer segments?”
Interviewee Question/Response
“The client’s doing well with Hyperactives with a higher
than market share of these customers and below average
percent leaving each year. On the contrary, the client has
below average penetration with Young Movers with a very
high percentage leaving each year. The client should assess
what it is doing well with Hyperactives and further
consolidate these customers and also look more closely at
what Young Movers want and address the high percentage
leaving each year.”
Interviewer’s Thoughts and Responses
Synthesises and able to develop conclusion
Accurately described the issues with these two customer
segments
“Excellent. Now have a think of what could be done to
improve the client’s share of Young Movers and how to
retain these customers. And if the CEO of the client walks
in and asks you for a 15 second summary of your latest
thinking, what would you say?”
Interviewer wants to close off the interview and push
towards a concise recommendation

Interviewee Question/Response
Profitability of the Customer Segments
“I’d say, the client needs to focus on the highly profitable
Hyperactives and Young Movers segments. Consolidate with
Client Customer Client Revenue Estimated Revenue Estimated Hyperactives and improve penetration and loyalty of Young
Customer Segments Share in % Contribution in % per Customer in £ Profitability Rank
Movers”.
Older Sleepers 25 25 375 3rd

Hyperactives 10 30 1,125 1st

Interviewer’s Thoughts and Responses
Concise and to the point. A strong candidate would have
Incomers 10 10 375 3rd also proactively described ways to improve loyalty of
Moderns 30 15 187.5 5th Young Movers, such as loyalty rewards and/or upgraded
handsets.
Careful 15 5 125 6th

Young Movers 10 15 562.5 2nd

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