Machine learning for direct marketing response models : Bayesian networks with evolutionary programming

Research output: Journal PublicationsJournal Article (refereed)

89 Citations (Scopus)

Abstract

Machine learning methods are powerful tools for data mining with large noisy databases and give researchers the opportunity to gain new insights into consumer behavior and to improve the performance of marketing operations. To model consumer responses to direct marketing, this study proposes Bayesian networks learned by evolutionary programming. Using a large direct marketing data set, we tested the endogeneity bias in the recency, frequency, monetary value (RFM) variables using the control function approach; compared the results of Bayesian networks with those of neural networks, classification and regression tree (CART), and latent class regression; and applied a tenfold cross-validation. The results suggest that Bayesian networks have distinct advantages over the other methods in accuracy of prediction, transparency of procedures, interpretability of results, and explanatory insight. Our findings lend strong support to Bayesian networks as a robust tool for modeling consumer response and other marketing problems and for assisting management decision making.
Original languageEnglish
Pages (from-to)597-612
Number of pages16
JournalManagement Science
Volume52
Issue number4
DOIs
Publication statusPublished - 1 Apr 2006

Bibliographical note

The authors thank the associate editor and three anonymous reviewers for their insightful comments. They also thank Dr. Guichang Zhang, Lin Li, Zhen Zhao, and Yuanyuan Guo for their assistance in data processing and conducting the experiments and Lingnan University for funding this project.

Keywords

  • Bayesian networks
  • Data mining
  • Direct marketing
  • Evolutionary programming
  • Machine learning

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