Targeting Customers for Profit: An Ensemble Learning Framework to Support Marketing Decision Making

IRTG 1792 Discussion Paper 2018-012

32 Pages Posted: 6 Mar 2018

See all articles by Stefan Lessmann

Stefan Lessmann

School of Business and Economics, Humboldt-University of Berlin

Kristof Coussement

Catholic University of Lille

Koen De Bock

Audencia Business School

Johannes Haupt

Humboldt University of Berlin - School of Business and Economics

Date Written: February 27, 2018

Abstract

Marketing messages are most effective if they reach the right customers. Deciding which customers to contact is thus an important task in campaign planning. The paper focuses on empirical targeting models. We argue that common practices to develop such models do not account sufficiently for business goals. To remedy this, we propose profit-conscious ensemble selection, a modeling framework that integrates statistical learning principles and business objectives in the form of campaign profit maximization. The results of a comprehensive empirical study confirm the business value of the proposed approach in that it recommends substantially more profitable target groups than several benchmarks.

Keywords: Marketing Decision Support, Business Value, Profit-Analytics, Machine Learning

JEL Classification: C45, C55, M31

Suggested Citation

Lessmann, Stefan and Coussement, Kristof and De Bock, Koen and Haupt, Johannes, Targeting Customers for Profit: An Ensemble Learning Framework to Support Marketing Decision Making (February 27, 2018). IRTG 1792 Discussion Paper 2018-012, Available at SSRN: https://ssrn.com/abstract=3130661 or http://dx.doi.org/10.2139/ssrn.3130661

Stefan Lessmann (Contact Author)

School of Business and Economics, Humboldt-University of Berlin ( email )

Unter den Linden 6
Berlin, Berlin 10099
Germany

Kristof Coussement

Catholic University of Lille ( email )

41 rue du Port
Lille, 59046
France

Koen De Bock

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312
France

Johannes Haupt

Humboldt University of Berlin - School of Business and Economics ( email )

Spandauer Str. 1
Berlin, D-10099
Germany

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