Optimal Targeting Through Uplift Modeling
Generating higher demand and increasing customer retention while reducing marketing costs
Most direct marketing targets the wrong people. It wastes money by focusing effort on many who will not react positively, and some who may even react negatively, while neglecting others who would respond favorably if targeted.
We need to target customers whose behavior we can change, rather than taking credit for outcomes that would have occurred even without our intervention.
This paper shows how a revolutionary new modeling technique – uplift modeling – can be used to optimize targeting to maximize the returns from direct marketing. It achieves this by predicting, at an individual level, the change in behavior likely to result from a particular marketing intervention.
