Using Machine Learning to Detect Customer Acquisition Opportunities and Evaluating the Required Organizational Prerequisites

University essay from KTH/Skolan för elektroteknik och datavetenskap (EECS); KTH/Skolan för elektroteknik och datavetenskap (EECS)

Abstract: This paper aims to investigate whether or not it is possible to identify users who are about change provider of service with machine learning. It is believed that the Consumer Decision Journey is a better model than traditional funnel models when it comes to depicting the processes which consumers go through, leading up to a purchase. Analytical and operational Customer Relationship Management are presented as possible fields where such implementations can be useful. Based on previous studies, Random Forest and XGBoost were chosen as algorithms to be further evaluated because of its general high performance. The final results were produced by an iterative process which began with data processing followed by feature selection, training of model and testing the model. Literature review and unstructured and semi-structured interviews with the employer Growth Hackers Sthlm were also used as methods in a complementary fashion, with the purpose of gaining a wider perspective of the state-of-the-art of ML-implementations. The final results showed that Random Forest could identify the sought-after users (positive) while XGBoost was inferior to Random Forest in terms of distinguishing between positive and negative classes. An implementation of such model could support and benefit an organization’s customer acquisition operations. However, organizational prerequisites regarding the data infrastructure and the level of AI and machine learning integration in the organization’s culture are the most important ones and need to be considered before such implementations.

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