Marketing examples

Data-Driven Decision Making for Business

Ted Kwartler

Data Dude

4 P's of marketing

1) Promotion

2) Pricing

3) Product

4) Placement

Data-Driven Decision Making for Business

To grow or not to grow

  • Should we grow at great expense?
  • Should we focus on profitability?

Data-Driven Decision Making for Business

Modeling customer behavior

Customer propensity model: provide a likelihood a potential customer will accept the offer

Data-Driven Decision Making for Business

Modeling customer behavior

Customer propensity model: provide a likelihood a potential customer will accept the offer

Data-Driven Decision Making for Business

Understanding a propensity function

$$

  • Probabilities are between 0 and 1
  • Most customers don't click on the ad
Data-Driven Decision Making for Business

Identify the tail, most likely responses

$$

  • Probabilities are between 0 and 1
  • Most customers don't click on the ad
  • If 95% of the time customers don't click, an accurate model would predict no-clicks
  • So focus on the accuracy in the top decile (blue box)
Data-Driven Decision Making for Business

Model predictions by expected responses

Data-Driven Decision Making for Business

Return on investment

How much money is returned for each spent dollar?

Data-Driven Decision Making for Business

Costs and revenue

Let's compare cost and revenue

Data-Driven Decision Making for Business

Profit curve

Ultimately, the model propensities by the profit are important

Data-Driven Decision Making for Business

Off to it!

Data-Driven Decision Making for Business

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