Cost ($) | Total Customers Contacted | Positive Responses |
---|---|---|
100000
|
100000
|
20000
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Cost ($) | Total Customers Contacted | Positive Responses |
---|---|---|
10000
|
10000
|
6000
|
20000
|
20000
|
10000
|
30000
|
30000
|
13000
|
40000
|
40000
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15800
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50000
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50000
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17000
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60000
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60000
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18000
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70000
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70000
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18800
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80000
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80000
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19400
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90000
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90000
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19800
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100000
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100000
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20000
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Cumulative Gains Chart:
Lift Chart:
Analyzing the Charts: Cumulative gains and lift charts are a
graphical representation of the advantage of using a predictive model to
choose which customers to contact. The lift chart shows how much more likely
we are to receive respondents than if we contact a random sample of customers.
For example, by contacting only 10% of customers based on the predictive
model we will reach 3 times as many respondents as if we use no model.
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1. Calculate P(x) for each person x
2. Order the people according to rank P(x)
3. Calculate the percentage of total responses for each cutoff point
Customer Name P(x) Actual Response Alex 88 Y Amy 87 N Hilary 81 Y Philip 80 Y Bob 79 Y Catherine 77 N Nancy 76 Y Jessica 75 Y Preston 75 N Laura 71 Y Elizabeth 70 Y Kim 69 N Erin 65 Y Alan 61 N Chris 58 N Fred 52 N Margot 49 N Trent 45 N Sean 35 Y John 24 N
4. Create the cumulative gains chart:
Total Customers Contacted Number of Responses Response Rate 2 1 10% 4 3 30% 6 4 40% 8 6 60% 10 7 70% 12 8 80% 14 9 90% 16 9 90% 18 9 90% 20 10 100%
5. Create the lift chart: