Uplift Modelling
In contrast uplift modelling uses both the treated and control customers to build a predictive model that focuses on the incremental response. To understand this type of model it is proposed that there is a fundamental segmentation that separates customers into the following groups:
- The Persuadables : customers who only respond to the marketing action because they were targeted
- The Sure Things : customers who would have responded whether they were targeted or not
- The Lost Causes : customers who will not respond irrespective of whether or not they are targeted
- The Do Not Disturbs or Sleeping Dogs : customers who are less likely to respond because they were targeted
The only segment that provides true incremental responses is the Persuadables.
Uplift modelling provides a scoring technique that can separate customers into the groups described above.
Traditional response modelling often targets the Sure Things being unable to distinguish them from the Persuadables.
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