Propensity Model
From a tactical point of view, the activity of estimating the propensity of an individual client in responding favourably to a certain marketing initiative allows us to concentrate our energies on those clients who have a higher probability of complying and, at the same time, to optimise the profitability of a campaign by maximising redemption.
The aim of producing a ‘Propensity Model’ is to assign a score to a client which denotes that client’s propensity to commit to a particular state: whether they adhere or not to a promotional product/service.
Assigning a score occurs on the basis of processing of statistical data, which compares the features and behaviour of individual clients (socio-demographic, products owned, services accepted, business contracts) with the past adherence or non-adherence to a product/service which is similar to the one we wish to promote.
The use of this score as selection criteria allows market resources to efficiently plan and to easily measure the campaign.