The Best Thinking in Business Analytics from the Decision Sciences Institute

1. Predictive Modeling of Customer Response Behavior in Direct Marketing

—Young H. Chun, Louisiana State University

—Yoonhyuk Jung, Ulsan National Institute of Science and Technology, Korea

Abstract

Using the records of customers’ responses over time in direct marketing, many authors have proposed various curve-fitting models to describe and predict the number of responses received after the launch of a direct marketing campaign. Some of those models are based on simplifying assumptions that are not realistic in many practical situations. In this paper, we first propose a probabilistic response model that has many desirable properties. Our geometric response model has three meaningful parameters: (1) an ultimate response rate of recipients, ...