Piggy Bank’s goal to provide incentives could mean planning ahead what types of structures can be offered while at the same time maintaining the maximum profit generation schemes. Usually, offering promotions gives a company certain risks because the task involves investment and sacrificing a segment of the company’s assets in terms of gaining more profit. Therefore, in order for Piggybank to minimize these risks, a statistical methodology should be implemented. There are practically many types of statistical tools for research.Depending on the goal of the researcher, these tools can easily provide decision making directives for companies whether they can achieve success or failure with their soon to be launched programs. For Piggybank, it is important that the company first sees to it whether offering certain credit card incentives would be beneficial for the business.
In terms of data gathering and analysis, one of the simplest statistical tools that can be used is to conduct a survey.Surveys directly involve the method of gathering data by direct extraction from the respondents, in which case are the credit card holders or soon to be applicants. In order to help Piggybank, a survey questionnaire that intentionally asks clients how many times they use their credit cards in a year may be created. With this data, the descriptive statistics that can be extracted will provide Piggybank an immediate picture whether there is a significant number of transactions that can compensate to the amount of money that will be allotted for incentives.If Piggybank wishes to test whether there is a significant difference between its projected customer loans and the value accumulated in the surveyed amount of transactions, then a one sample T-test for the mean can be initiated. Meanwhile, a statistical tool called Linear Regression can be used by Piggybank if it wants to create an equation that will predict the amount of profits that can be generated from the incentives program.
Linear Regression intends to come up with a model of the relationship of two variables using a fitted line for the data (Dept. of Statistics, 2007). Depending on the data to be accumulated from the surveyed respondents, the amount of profits can be calculated by inputting values such as incentives value and amount of customer’s transaction. A linear equation can be easily formulated using regression analysis to help Piggybank predict whether it is substantial to offer an incentive or not.
