Abstract
In this study, we present a novel cost-sensitive approach for uplift modeling in the context of cross-selling and workforce analytics. We leverage referrals from sales agents across business units to estimate the individual treatment effects of incentives on the cross-selling outcomes within a company. Uplift modeling is employed to predict relationships between salespeople that should be encouraged based on the probability of successful cross-selling – defined when a customer accepts the product suggested by sales agents. We conducted experiments on data from a Chilean financial group, evaluating both statistical and profit metrics. Exploring various machine learning classifiers for predictive purposes, we observed a significant improvement over the current approach, which exhibits an uplift below 0.01. Finally, we show that selecting the best classifier with profit metrics results in a 31.6% improvement in terms of average customer profit. This emphasizes the importance of defining an adequate compensation scheme and integrating it into the modeling process.
We replicate the work of Schmitt et al. (2011) who find that referred customers are more loyal and valuable than customers acquired through other channels. While our results confirm that rewarded…