A Data Mining-Based Response Model for Target Selection in Direct Marketing

Identifying customers who are more likely to respond to new product offers is an important issue in direct marketing. In direct marketing, data mining has been used extensively to identify potential customers for a new product (target selection). Using historical purchase data, a predictive response model with data mining techniques was developed to predict a probability that a customer in Ebedi Microfinance bank will respond to a promotion or an offer. To achieve this purpose, a predictive response model using customers’ historical purchase data was built with data mining techniques. The data were stored in a data warehouse to serve as management decision support system. The response model was built from customers’ historic purchases and demographic dataset. Bayesian algorithm precisely Naïve Bayes algorithm was employed in constructing the classifier system. Both filter and wrapper feature selection techniques were employed in determining inputs to the model. The results obtained shows that Ebedi Microfinance bank can plan effective marketing of their products and services by obtaining a guiding report on the status of their customers which will go a long way in assisting management in saving significant amount of money that could have been spent on wasteful promotional campaigns.