Predictive Models

A predictive model is a mathematical model that makes it possible to predict future actions of clients or prospects. Predictive models are usually derived from historical customer data. For example, a model designed to identify customers who might terminate a subscription is typically based on the characteristics and past behavior of customers who have already terminated their contracts.

Why use a predictive model?

Predictive marketing models are mostly based on data mining techniques and the treatment of big data environments.

For example, here is a list of 7 types of predictive models:

  • Acquisition models that predict the probability of converting a prospect into a customer
  • Cross-selling models that predict the likelihood that an existing customer will buy an additional product or service
  • The models of additional sale
  • Attrition models
  • The value models that are used to predict the different value measures such as the lifetime of a customer relationship or the value generated if the customer buys a specific product
  • Tone patterns to predict what type of message will be best suited to each client
  • Risk models that estimate the probability of fraudulent activity or credit problems

 

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