4.1) Provides a clear and specific example of a potential disaster event that could impact SyPhone's business operations and customer base (3 points) • Explains how the chosen event would affect the company's ability to generate revenue and attract new customers (3 points) • Provides well-reasoned and detailed responses, using example, using examples and evidence to support their answers. (4 points)

 

Introduction SyPhone is a cell phone company that sells cell phone contracts to small to medium-sized companies, usually to equip their sales representatives and managers with cell capabilities. A typical contract covers 5 to 500 cell phones and includes phone equipment, support, service, maintenance, and unlimited phone calls for $80 to $100 per month per user. SyPhone finds itself in a highly competitive B2B market, one in which major service providers compete alongside several large resellers. The customer base is very sensitive to price, but only if service quality is high. Typically, a substantial barrier stands against customers switching to competitors, because such a switch would involve changing equipment and retraining users. However, customer switching is a possibility when contracts are about to expire. SyPhone needs to understand the profitability of its customers before generating a renewal bid for them. For new customers, SyPhone also needs to understand their potential profitability before offering them a contract. Historically, SyPhone has offered various discount rates to prospective customers. According to the company database, it appears that those customers who obtained the largest discounts are the least profitable in the short- term (as expected), but they have a somewhat lower churn rate. These customers tend to stay with the company longer and do not switch as much to competitors as do other customers. These case data may be used to explore whether offering large discounts is really profitable for the company in the long term or whether it is simply shooting itself in the foot. The case also involves an analysis of the appropriate discount factors to apply to future revenue. Understanding the data The SyPhone case study uses the standard Customer Lifetime Value template (for more information, please refer to the CLV tutorial). SyPhone customers may be grouped into two segments: