MSG Team's other articles

9210 Establishing Business Goals and Measurement is Necessary Before Embarking on E Marketing Implementation

Setting up a web page and promoting online business has become a necessity for all business organisations, irrespective of the size of the organisation and the business. Every minute, several thousands of people from all over the world are accessing the internet and searching for products and information. A few hundred of them could be […]

9579 How Contemporary Corporate Philanthropy Works and Its Impact on Societies

The Why and How of Corporate Philanthropy Corporate and business leaders often have humanitarian urges and instincts to help society after they have achieved a certain amount of success in their professional careers and fulfillment in their personal lives. Indeed, most corporate and business leaders once they have become legends often have an attitude of […]

11469 SWOT Analysis of IKEA

Introduction This article analyzes the strategy of the world’s leading furniture retailer, IKEA using the SWOT Methodology. The company was founded in 1943 and is known for its simple yet effective approach to retailing with the DIY or the Do It Yourself concept, which ensures that the company keeps costs to a minimum and passes […]

10131 Leaders Do Things Differently

AT&T Universal Card Services entered the credit card market at a time when the market was mature and there were numerous retail banking companies dealing with credit cards. In such a situation, the company chose to introduce their credit card with a competitive edge over competition. Against a market where in customers were paying huge […]

12212 What Are Green Supply Chains and Why They Can Be a Game Changer for Sustainable Businesses?

What Are Green Supply Chains and what is meant By Net Zero and Carbon Footprint? With concerns over climate change mounting and with the global push towards sustainability and the commitments to Net Zero carbon emissions in the near future, businesses have to look for ways and means to incorporate environmentally friendly practices in their […]

Search with tags

  • No tags available.

Regression scoring is one of the difficult but more precise and faithful marketing technique as compared to profiling and modeling. For targeting new and esteemed customers all the organization substantially pursue regression scoring techniques. Following is the process involved in regression scoring:

  1. Identify the prospect or probable customers from the population of all customers and draw random samples from them.

  2. Collect individual characteristics from the information and data available from these samples.

  3. Record which all prospects are converted into customers after performing the marketing campaign on individual prospects.

  4. Using this information and trend, produce a regression scoring model which is a series of important variables which are used to predict and which prospects can be easily converted into customers in accordance to their individual characteristics.

  5. After the estimated model is ready the researchers engage themselves in following process.

    1. According to the model, create regression equations to implement information of future group of prospect customer.
    2. Plug the information and individual characteristics of prospects that are not in the sample to calculate scores.
    3. Rank the prospects according to the regression score according to highest and lowest values.
    4. Perform marketing campaigns at the prospects that have scores above the cutoff value. This cutoff score depend on most of the important marketing and financial factors.

Following are the general types of regression scoring which are implemented according to specific need by the organization:

  1. Linear Regression Scoring: This type of scoring is performed by implementing linear regression algorithm on the random sample of data. The process includes scoring techniques on variables that have linear dependencies. For example if scoring has to be done on 2 distinct data values and each these values is associated with 5 distinct characteristics, then 25 linear regression analysis are performed.

  2. Non-Linear Regression Scoring: This is an extension linear regression scoring process which includes performing scoring by implementing nonlinear regression algorithm on the random sample of data. This means that the algorithm does not perform analysis on direct linear relationships of sample value, and hence the more and specific nonlinear analysis techniques are performed according to the conditions expected.

  3. Weighted score tables: This type of scoring does not need any sampling of data before associating scores to prospects. Weighted and important variables are directly associated with sample of prospect to determine individual scores for them without creating historic regression model. This type of scoring is not as accurate as linear or nonlinear regression scoring but it takes less time to perform.

Regression scoring has many advantages over other marketing methods. The primary advantage is that it measures the usefulness of variables that helps in determining which prospect to target and when. Secondly it provides a sophisticated and scientific process to determine the cutoff values or scores for a particular marketing campaign. The outcome of regression scoring helps in enhancing marketing efficiency. The primary and the only disadvantage of regression scoring is that the whole process is very complex and costlier as compared to profiling which is easy to perform.

Even if regression scoring is considered as complex and costly process but it is hardly recommended for an organization to implement regression scoring as it usually targets high marketing efficacy and effectiveness. In acquiring new customers regression scoring is the most capable and important marketing process that yields great results, hence organization should usually compromise on complexity and cost.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

What is Customer Satisfaction ?

MSG Team

Customer Acquisition Cost

MSG Team

Customer Acquisition – Meaning and its Process

MSG Team