Data Mining Approach for Direct Marketing of Banking Products with Profit/Cost Analysis

Mitik, Merve
Korkmaz, Ozan
Karagöz, Pınar
Toroslu, İsmail Hakkı
Yucel, Ferhat
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 results and makes it difficult to make a successful product and channel selection for the offer. In this paper, we propose a hybrid system, which first classifies the customers to decide if s/he is interested in the offered product, and then clusters them for product and channel suggestions. Experiments with real life banking data show very promising accuracy results for predicting the proper product and channel for the customers. Moreover, cost-profit analysis is also added to this problem. Our experiment results show that the proposed method decreases a fraction of the total profit, but since the decrease in the total cost is very large, there is a huge increase in the overall profit/cost ratio.


Data mining approach for direct marketing of banking products with profit/cost analysis
Korkmaz, Ozan; Toroslu, İsmail Hakkı; Karagöz, Pınar; Department of Computer Engineering (2017)
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...
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...
Financial strategic planning and knowledge management : a comparative case study on Turkish Banking Sector
Durtaş Başpınar, Canan Pelin; Güçlü, Nusret; Department of Science and Technology Policy Studies (2012)
It is not easy to set up a knowledge management system (KMS) in banking due to the size of large services, the variety of products, dealing with large information, serving under high cost pressure and highly competitive market conditions. This thesis proposes that strategic management is a knowledge processing outcome, and should be an integral part of the financial strategic planning (FSP), which is essential in the agility of financial organizations.. This thesis will explore a FSP model that is developed...
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 ...
Soft Systems Methodology for design process improvement
Bayraktaroğlu, Bengül; Özkan Yıldırım, Sevgi; Department of Information Systems (2018)
Organizations from different business sectors, which are certified by some standardization organizations, are increasingly prioritizing the process improvement to raise their product's quality. The process improvement in these organizations has focused principally on the refinement of existing processes to improve. This thesis study describes the application of Soft Systems Methodology (SSM) for engineering design process improvement in an organization. In the concept of thesis study, it will lead to identi...
Citation Formats
M. Mitik, O. Korkmaz, P. Karagöz, İ. H. Toroslu, and F. Yucel, “Data Mining Approach for Direct Marketing of Banking Products with Profit/Cost Analysis,” REVIEW OF SOCIONETWORK STRATEGIES, pp. 17–31, 2017, Accessed: 00, 2020. [Online]. Available: