An Overview of Data Mining Techniques - Data Mining Techniques in CRM: Inside Customer Segmentation - page 30

Figure 2.5 Gains chart.
respective campaign by choosing the tiles to target. They may choose to conduct a
small campaign, limited to the top tiles, in order to address only those customers
with very high propensities and minimize the false positive cases. Alternatively,
especially if the cost of the campaign is small compared to the potential benefits,
they may choose to expand their list by including more tiles and more customers
with relatively lower propensities.
In conclusion, these charts can answer questions such as:
• What response rates should we expect if we target the top n % of customers
according to the model-estimated propensities?
• How many target customers (potential churners or buyers) are we about to
identify by building a campaign list based on the top n % of the leads according
to the model?
The answers permit marketers to build scenarios on different campaign
sizes. The estimated results may include more information than just the expected
response rates. Marketers can incorporate cost and revenue information and build
profit and ROI (Return On Investment) charts to assess their upcoming campaigns
in terms of expected cost and revenue.