Lambda Networks has had great success selling mobile hotspots with a social twist. With Lambda, you pay
Question:
Lambda Networks has had great success selling mobile hotspots with a social twist. With Lambda, you pay for data as you go and take it with you on your 4G mobile hotspot You can post to Facebook, check the news, video chat with your friends, check sports scores, and anything else you do online. Lambda works in 100 major U.S. cities covering approximately 200 million people across the country.
The Lambda personal hotspot has an open Wi-Fi signal, so anyone near you can connect to it If they do, you’ll both receive 100MB of free data The system lets you own data, instead of it owning you, and your data never expirs. The company has been growing rapidly, but a careful look at the data shows that it is losing 1.3 customers for every two they gain.
Jon Kelly and Jayme Meriah of Lambda have been having a heated debate regarding additional budget that Jayme is seeking to improve customer service and other aspects of the customer experience, including improvements in the company website and development of a mobile version of the website. Recent results from their customer tracking research point to a decided downward trend in customer ratings of their service.
Kelly has taken the position that customer satisfaction is really not that important and that the company should not be spending additional funds for customer service–related activities. He points to the fact that sales are increasing briskly as proof of his position. He would like to spend the additional budget on advertising and promotion activities, believing that this will go farther in improving the growth in sales. Jayme has pointed out that she believes that improving the customer experience and customer satisfaction is important in building customer loyalty and improving customer retention, taking the position that it is less expensive to retain a customer than to get a new customer.
The data from 25 randomly selected respondents are provided below. Satisfaction is measured on a 10-point scale with 1=completely unsatisfied and 10=completely satisfied. Loyalty is also measured on a 10-point scale, with 1 = “I plan to drop my service in the near future” and 10 = “I plan to continue my service indefinitely.”
Questions
1. Based on the argument, which variable should be the dependent variable? Why do you say that?
2. Run a bivariate regression with your dependent variable. What is the correlation between the two variables? What is the R2 statistic? What does it tell us? What is the regression coefficient? What does it tell us?
3. Does this analysis tend to support Jon’s position or Jayme’s? Why do you say that?
Step by Step Answer:
1 On this basis the dependent variable should be customer satisfactionThis is because the debate rev...View the full answer
