Author(s)

G. Dragosavac

Abstract

Using data mining to estimate customer's buying potential G. Dragosavac Senior Consultant, Data Mining and Analytical Intelligence, SAS Institute, South Africa Abstract Maintaining the relationship with a customer is a costly exercise, and not all the customers provide the same value to an organization. There are some customers who buy little, the value of their purchase is low and this is unlikely to change, regardless of the type of stimuli. The organization loses money by investing in this type of relationship. Then, there are other customers with whom a stronger relationship and better customer interaction would result in a more profitable relationship and higher value to the organization. These two groups of customers differ in their buying potential. This paper reports on the analysis carried out in an insurance company, with the goal to estimate and realize the purchasing potential of about a million and a half customers who have rarely been contacted in the past. 1 Introduction Due t

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