Data mining approach for direct marketing of banking products with profit/cost analysis

Download
2017
Korkmaz, Ozan
Nowadays, direct marketing is widely used advertisement method by many business areas such as banks. The main purposes of direct marketing are to maximize return on investment, minimize cost of promotions and reach to peak number of customers that prefer the offerred campaign. Therefore, it is necessary to collect and process huge amount of customer related data to decide questions of which customer will be offered a product, which product will be suitable to him/her and via which channel the promotion will be presented. However, because positive customer response rates are much less than negative ones, negative data instances dominate positive ones and cause imbalance in dataset. This problem makes it difficult to make a successful selection of product and channel for a promotion and therefore, brings about decrease on true predictions and total profit value while false predictions and total cost value increase. In this thesis, methods are proposed which improve profit/cost ratio to increase return on investment while increasing accuracy rate. Experiments with proposed methods applied on a real bank dataset show very promising profit/cost ratios and accuracy rates on predicting customers with proper products and channels. Results of experiments indicate that proposed methods yield some amount of decrease on total profit value; however, since the decrease rate of total cost value is much greater than total profit one, profit/cost ratio increases. 

Suggestions

Data Mining Approach for Direct Marketing of Banking Products with Profit/Cost Analysis
Mitik, Merve; Korkmaz, Ozan; Karagöz, Pınar; Toroslu, İsmail Hakkı; Yucel, Ferhat (2017-06-01)
Nowadays, many businesses, such as banks, use direct marketing methods to reach customers to minimize the campaigning cost and maximize the return rate. To achieve this, huge customer data should be analyzed to determine the most appropriate product offer for each customer and the most effective channel to reach her/him. However, since only a very small amount of responses collected from the customers are positive to the offers, the dataset is very imbalanced. This decreases sensitivity ratio of prediction ...
Product and channel prediction for direct marketing in banking sector
Mıtık, Merve; Karagöz, Pınar; Toroslu, İsmail Hakkı; Department of Computer Engineering (2017)
Direct marketing is an advertisement method in which customers are directly informed for product offers through one-to-one communication channels. With the advancements in technology, customer databases of businesses began to grow well, therefore, detecting the needs of each customer and offering the optimal product becomes harder. Large customer dataset needs to be analyzed to make the best product offerings to the potential customers over the most proper channels and to increase the return rate of a marke...
Data Mining based Product Marketing Technique for Banking Products
Mitik, Merve; Korkmaz, Ozan; Karagöz, Pınar; Toroslu, İsmail Hakkı; Yucel, Ferhat (2016-12-15)
In direct marketing, in order to increase the return rate of a marketing campaign, the massive customer dataset is needed to be analyzed, to make best product offers to the customers through the most proper channels. However, this problem is very challenging, since, usually only for very small portions of the whole dataset, some positive returns are received. This paper studies the similar problem for bank product marketing. The proposed approach is a two layer system, which first clusters the customers and...
Determining online consumer typologies and their shopping behaviors in B2C e-commerce platforms
Huseynov, Farid; Demirörs, Onur; Türetken, Oktay; Department of Information Systems (2016)
Business-to-consumer (B2C) e-commerce is the service or product exchange from businesses to consumers over the Internet. B2C e-commerce enables customers to easily compare offered products and services, to find cheaper and better ones from many alternatives and to shop from any given store without physically visiting them. Despite those conveniences provided by B2C e-commerce, a large number of customers prefer to stay away from the idea of shopping over internet due to several factors. For better customer ...
International neoliberal development regime and regional development banks (African Development Bank, Asian Development Bank and Inter-American Development Bank)
Hecan, Mehmet; Tayfur, Mehmet Fatih; Department of International Relations (2017)
This thesis aims to illuminate regional development banks’ (RDBs) role in global diffusion of neoliberal policies since the early 1980’s. In this regard, it argues that along with the Bretton Woods Institutions (BWIs), the RDBs have also facilitated the spread of neoliberal policies, as these banks have practiced similar conditional/policy-based lending. In order to better explain the complementary roles of BWIs and RDBs within an analytical framework, the thesis employs the international relations (IR) con...
Citation Formats
O. Korkmaz, “Data mining approach for direct marketing of banking products with profit/cost analysis,” M.S. - Master of Science, Middle East Technical University, 2017.