With direct marketing, you likely have a benchmark success rate from previous similar campaigns that you base your goals on, and you try to optimise it through various strategies, whether by trying to offer the best deals or by using behavioural tactics.
At Principa, we engage with clients and organisations across the entire credit lifecycle and track the focus of the South African credit industry. For nearly ten years the focus has consistently been in the collection space, but recently (since early 2021) this has changed and a large number of our clients are focused on acquisitions and originations.
In Part One of this two-part blog, we started providing a short overview of just some of the propensity models that Principa has developed. In this Part Two, we continue to look at different types of propensity models available across the customer engagement lifecycle that are used to predict behaviour and solve business problems.
Propensity modelling attempts to predict the likelihood that visitors, leads and customers will perform certain actions. It’s a statistical approach that accounts for all the independent and confounding variables that affect said behaviour. The propensity score, then, is the actual probability that the visitor, lead, or customer will perform a certain action.
In PART 1 of this two-part series, we explored how the current socio-economic climate resulting from the lingering financial hangover caused by the pandemic is negatively impacting the consumer’s ability to settle a debt.
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