Predictive Analytics Let's Predict How Much Money customers are going to spend? A presentation for Data Mining Course

1. Marketing Analytics
Foundations
Hanieh Kashfi
May 2019

2. • Foundations-Marketing Analytics
Module 1
Introduction
to foundation
of marketing
analytics.
Module 2
Statistical
Segmentation
Module 3
Managerial
Segmentation
Module 5
Customer
Lifetime Value
Module 4
Targeting
and Scoring
Models
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3. How Target could predict whether a customer is pregnant
or not !

4. • Predictive Analytics
Predictive
Analytics
The probability of buying a product if it is
recommended to you!
How google decides to show you certain
adds!
Mathematical models behind all those
decisions!
The ability of companies to exploit the data
they have about the customers, and predict
things we did not even think were possible.
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5. • Predict How Much Money customers are going to spend?
Calibration Data
A statistical model
to analyze it
Apply and Assess
Calibration data is a dataset in which you
observe both the predictors, and the variable
you are trying to predict.
Predict the amount
Second Model
predict the probability
First Model
Create the Scoring Model
Go Back in Time! (Predictors + Target Variable)
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6. Data Loading
6

7. Predictor Variables
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8. Target Variable
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9. Variable Merging
9

10. Prob.Model
10

11. Sub-sampling
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12. Amount.model
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13. Plotting
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14. Recalibrate & Plot
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15. RFM Variable as of today
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16. Predict the target variable
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17. Histogram
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18. Customer Lifetime Value (CLV)
analyze what is happening today and what has
happened in the recent past in order to:
predict the revenues customers will generate in the
future.
What you learn to do in this module:
Customer Acquisition Campaign
Invests in public relations, advertising,
email campaigns
only a minor success
• Value
• Cost
• Good investment ?

19. • Customer Lifetime Value (CLV)
Wouldn't it be nice to know how
to compute this in the first place
and concentrate your marketing
dollars on the most valuable
customers in the long-term?
Identify, which customers or which
segments of customers are
strategic for the future success of
the firm
Compare one acquisition campaign
to another!
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20. Thank You