# Pilgrim Case Study

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CASE STUDY 4
QUESTION 2
PILGRIM BANK

QUESTION 2A

“Are online customers significantly more profitable than offline customers?”

“Are online customers significantly more profitable than offline customers?”

In the year of 1999, only about 12% of the customers use online channel. Most of Pilgrim
Bank’s customers (around 88%) are offline customers.

“Are online customers significantly more profitable than offline customers?”

Year 1999

Year 2000

“Are online customers significantly more profitable than offline customers?”
Analysis
- t-value (1.254 VS 3.459)
In 1999, since the |t statistic| < 1.96 (5% significance level), it shows that the variable – pilgrim online is statistically insignificant, and does not predict or explain relationship between profitability and the status of the customers (whether the customer is online or not). However, in 2000, the t value has become 3.459 (>1.96). The factor of online has become statistically significant. If the number of online customer increases by 1, the profit increases
20.
- P-value (0.2099 VS 0.000543)
The P-value for 1999 is 0.21, much more than 0.05, we accept the null hypothesis and conclude that there is no difference between the profitability of online and offline customers. However, in the year of 2000, p value drops to 0.000543 (<0.05), suggesting a strong relationship between being an online customer and being profitable.

“Are online customers significantly more profitable than offline customers?”
Analysis
Although the data in 1999 does not show a strong relationship between profitability and the use of online channel, the situation has been changed in 2000.
The t value has shown a strong relationship between profitability and online customers.

QUESTION 2B

“What role do customer demographics such as age (X9age) and income (X9inc) play in analyzing customer profitability for online and offline customers? What about geographic location (X9district)?”

CUSTOMER DEMOGRAPHICS
Generally, there are more

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