Services

Purchase Propensity Models

The purpose of propensity modeling is to build models that indicate the propensity of each customer segment to purchase a specific product. Lightstone's unique methodology for determining when a customer will purchase, what he/she will purchase, and in which order the purchases will be made is market tested and supported by tangible results. These models in turn enable our clients to build effective up-sell, cross-sell and retention strategies.

A comprehensive, relevant data-set is critical to effective propensity modelling, and Lightstone's SWAN model - in conjunction with internal client data - provides a significant advantage in this respect. Amongst the variables typically considered are the customer's:

• Demographic profile
• Credit profile
• Home loan profile
• Location profile
• Purchase behaviour in the previous 12 months across relevant categories
• Product holding of all relevant products

The outcome of the modelling process is that clients can tell which customer segments are more or less likely to take up specific products and which events are likely to trigger this behaviour. They are consequently able to develop and implement effective, focused strategies to maximise profit.

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