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Which one would result in more revenue this year?

Dear community member 

I have a question regarding a case study mentioned in Bain&company website, here is the link 

https://www.bain.com/careers/interview-prep/case-library/fashioco-case-study/

my Q is about the second part: Which one would result in more revenue this year?

in this part, I got confused about the calculation of intermittent sales. why in the calculation, we have 10 million people in both 40$ and 75$ purchase...

to me, it should be 

2.5 mil person * 40$  AND

7.5 mil person * 75$

look forward to having your opinion.

Thank you

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Profile picture of Ian
Ian
Coach
on Aug 23, 2020
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi Mehrasa,

Very important lesson here in casing: The details matter!

The case is indeed correct. 

Option A (Rewards Program):

# of customers: 10M (assume flat)

Estimated number of customers participating in Y1: 25%​

------------------------------------------------

Option B (Intermittent Sales):

Customers (flat): 10M

See the difference? Intermittent sales says nothing about customer breakdown changing, while the rewards program does.

Profile picture of mehrasa
on Aug 24, 2020
Thank you Ian for the reply :)
Profile picture of Ian
Ian
Coach
on Aug 24, 2020
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success
My pleasure!