1. Decision Trees in Analytical Model Development
A quick look at a case using…
Decision Trees in Analytical Model Development
presented by
Marty Middleton
for ISQS 7342
Fall 2008

2. Introduction Company named Nets2U…
markets networking equipment to businesses
has existing client base
sales history in a targeted geographic area
Business to business marketing application

3. Objective Nets2U seeks to… Nets2U has seeks an analytical model
improve targeting of regional customers, and
ultimately expand sales
Nets2U has seeks an analytical model
Prioritize potential sales accounts based on…
probability of sale
value of sale (possible)
expected servicing costs (possible)
Target sales activities according to priority

4. Approach
Use data mining techniques as components of the general analytical model
Use known and existing sales data to forecast sales among segments of demanders
Match known sales (and attributes) with attributes of universe data to forecast opportunities

5. Data Firm sales data Universe data of target region
known data collected by firm
Universe data of target region
supplied by data vendors (Dun and Bradstreet, etc)

6. Model Development Use Decision Trees to find key predictors of sales
Explore the firm sales data using relationships on commercial data fields
Enterprise size
Corporate location
Regional concentration

7. Model Development Combine predictive approaches – Ensemble
Decision trees
Regression
Neural network

8. Model Development

9. Results Predicted sales probability from Ensemble score
High
Medium
Low
76,000 High Probability demanders
12,000 customers
The power of analytics comes from using known sales data to build a model that is applied against the universe of enterprises.