Data Mining
Data Mining Weekly Assignment 6: LIFT; CRM; AFFINITY POSITIONING; CROSS-SELLING AND ITS ETHICAL CONCERNS.
What is meant by the term “lift”? The term “lift” describes the improved performance of an exact or specific amount of effort on a modeled sampling, as opposed to a random sampling (Spang, 2010). In other words, if you are able to market via a model to say, a given number of random customers (e.g. 1000), and we expect that 50 of them would be successful, then a model that can generate 75 successes would have a 50 percent lift. “Lift” is possibly the most commonly metric used to measure targeting model performance in marketing applications – the purpose of which, is to identify a subgroup or target from a larger population (Coppock, 2002 and Spang, 2010). The subgroup targeted or target members selected are those who are most likely to respond positively to a marketing offer. As such, the model is doing well if as predicted – the response within the targeted section is much better than average when compared to the population as a whole. Lift then, is simply the ratio of these values: target response divided by average response (Coppock, 2002). “Lift Charts” and “Lift Curves” are terms often seen in direct marketing. To quickly define them here – a lift curve is a popular technique which assigns a “probability of responding” score when used in an attempt to determine who the likely responders from a population are.
“The lift curve helps us determine how effectively we can “skim the cream" by selecting a relatively small number of cases and getting a relatively large portion of the responders” (Keating, 2013).
A lift chart or a “Gains Chart” is a convenient summary of all the cumulative lift curves whereby all the information in these multiple classification matrices are turned into a graph (Keating, 2013 and Coppock, 2002).
What is Customer Relationship Management (CRM)?
“There is only one boss. The customer. And he can fire everybody in
What is meant by the term “lift”? The term “lift” describes the improved performance of an exact or specific amount of effort on a modeled sampling, as opposed to a random sampling (Spang, 2010). In other words, if you are able to market via a model to say, a given number of random customers (e.g. 1000), and we expect that 50 of them would be successful, then a model that can generate 75 successes would have a 50 percent lift. “Lift” is possibly the most commonly metric used to measure targeting model performance in marketing applications – the purpose of which, is to identify a subgroup or target from a larger population (Coppock, 2002 and Spang, 2010). The subgroup targeted or target members selected are those who are most likely to respond positively to a marketing offer. As such, the model is doing well if as predicted – the response within the targeted section is much better than average when compared to the population as a whole. Lift then, is simply the ratio of these values: target response divided by average response (Coppock, 2002). “Lift Charts” and “Lift Curves” are terms often seen in direct marketing. To quickly define them here – a lift curve is a popular technique which assigns a “probability of responding” score when used in an attempt to determine who the likely responders from a population are.
“The lift curve helps us determine how effectively we can “skim the cream" by selecting a relatively small number of cases and getting a relatively large portion of the responders” (Keating, 2013).
A lift chart or a “Gains Chart” is a convenient summary of all the cumulative lift curves whereby all the information in these multiple classification matrices are turned into a graph (Keating, 2013 and Coppock, 2002).
What is Customer Relationship Management (CRM)?
“There is only one boss. The customer. And he can fire everybody in
References: Business Dictionary (2013). What is scalable? Definition and meaning. In BusinessDictionary.com - Online Business Dictionary. Retrieved February 25, 2013, from http://www.businessdictionary.com/definition/scalable.html Coppock, D Francis, P. T. (2008). Cross-Selling Your Hospital’s Capabilities. Clinical Laboratory Sales Training with Peter Francis. Retrieved February 26, 2013, from http://www.clinlabsales.com/pdf/Cross-Selling-092508.pdf Goodhue, D NRMLA - National Reverse Mortgage Lenders Association (2008). Ethics Advisory Opinion 2008-01: Ethical Advertising. NRMLA - National Reverse Mortgage Lenders Association Newsletter, 1-4. Olson, D., & Shi, Y Olson, D., & Shi, Y. (2005). Market Basket Analysis and Neural Networks. In Introduction to Business Data Mining (1st ed.). Irwin: McGraw-Hill . Onyx (2013) Spang, J. J. (2010). MI824: Data Mining. Boston College. Retrieved February 24, 2013, from https://www2.bc.edu/~spang/mi824/C9Notes.htm Tsai, T Writing, A. (2013). The Advantages of a CRM System. Small Business - Chron.com. Retrieved February 24, 2013, from http://smallbusiness.chron.com/advantages-crm-system-43409.html