Case Study - Indomart

Client Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Total Sales
ID 19 19 19 19 19 19 19 19 19 19 19 19 in Lakhs
C1 1989 976 897 482 1898 1353 999 8594
C2 753 931 484 903 1148 1007 50 332 701 909 7218
C3 266 188 1565 934 284 342 649 1304 1605 7137
C4 962 1408 1551 1252 156 1636 200 1015 8180
C5 1631 1366 191 1355 1487 334 0 1285 1707 9356
C6 1560 1635 1111 1607 758 793 1055 439 663 9621
C7 1079 1201 1352 1476 1785 1155 1265 1251 839 11403
C8 1189 1999 848 1985 1985 1899 1530 11435
C9 962 980 121 613 617 807 732 4832
C10 714 1600 1985 857 1122 632 6910
C11 572 662 145 141 816 289 1522 544 1485 6176
C12 452 234 405 415 121 175 273 564 457 132 3228
C13 1789 581 89 1176 1654 106 444 1106 6945
C14 1985 1894 1385 1785 1591 1944 1897 12481
C15 1114 238 1153 171 1062 680 486 1652 6556
C16 963 69 1524 1760 203 361 661 1263 1200 553 1183 9740
C17 323 1374 947 613 984 1560 1542 445 7788
C18 497 760 123 156 142 243 1119 774 3814
C19 1384 466 491 226 749 211 121 3648
C20 1897 1987 1866 1989 1986 9725
C21 1898 978 775 780 4431
C22 2911 2911
C23 1452 792 2244
C24 1523 41 468 323 160 1555 4070
C25 755 758 852 2365
C26 773 299 901 1430 427 429 256 321 4836
C27 1897 1989 1999 5885
C28 2566 2411 4977

The table above shows the monthly sales data of a B2B company - Indomart. Rows in the table show the purchases done
by each client on monthly basis. Blanks in the data shows that no purchase made by the client in that particular period or
month. For example, row 3 of the table represents the purchases made by client-C2 over a period of 12 months from Jan-
2019 to Dec 2019 and this client did not make any purchase in the month of July and Nov.

Indomart is launching a new range of products in few segments under their most trusted brand. The company wants to
send a catalog and free samples for the upcoming inaugural trade fair of this new range. Indomart is considering sending
these catalogs and free samples to only 25% of the best consumers. Indomart is taking the help of its marketing analytics
division to figure out who are its best customers so that this investment of sending catalogs and free samples should
result in maximum return on investment.

Q1: How will Indomart identify the best customers?

a) What factors should be considered to rank all the clients mentioned in the above list from C1 to C28? Rank 1 for
a client signifies that this customer is most likely to respond to the promotional campaign by Indomart and would
come for the trade fair and more likely to place order.
b) Develop a mechanism to provide a unique score to each client which will help in preparing ranks. How would you
test that above metric is correct or not in meeting its objective? Develop a procedure to test its effectiveness.

Q2. Will higher rank customers in the above metric necessarily have higher CLV? What are the limitations of the method
developed? Can the same ranks apply to all types of industries or some modifications are required?