Case 1 (Propensity Modeling, List Selection)
Ginger & Roger Ballroom Dance studio is interested in increasing profit
by attracting future brides to engage in dance lessons prior to their
wedding. Six months ago, the dance school purchased a list from a Wedding
Registry Company and they mailed a discounted coupon featured as a wedding
gift to potential customers ages 20 to 45. After three months of activity,
the response and sales data were appended to the original list and analyzed.
As a result, the dance studio plans to build a propensity model to target
brides inclined to respond with sales exceeding $29.99.
Business Case 2 (Lifetime Value Modeling)
Save the O'Pooch is a non-profit institution that relies on donor contributions
to help find perfect homes for older stray dogs. The organization is interested
in maximizing the lifetime donor value for each of their contributors.
The group has just completed the calculation of donor lifetime value and
is now ready to build a LTV (Lifetime Value) model to predict the expected
lifetime value for each customer in the database. Once the expected LTV
is scored for each customer, the organization will be able to develop
an effective fundraising strategy that tailors to different levels of
lifetime value segments in order to steer each prospect toward their maximum
Business Case 3 (Target & Response Modeling)
Loan$2U, a major home mortgage lender, wished to double its market share
within one year. Loan$2U merged internal and external data sources, and
applied statistical methodologies including linear regression and CHAID
analysis to this combined data. As a result, Loan$2U was able to isolate
those factors most highly predictive of loan acceptance & adjust its business
policies accordingly. Contacts to prospective customers least likely to
accept the loan offer were suppressed, facilitating more effective target
marketing and priority handling to those more likely to accept the loan
offer. The net impact was an increased response rate with decreased operational
costs, significantly boosting the profit margin of Loan$2U and increasing
its market share.