MODELING CUSTOMER ENGAGEMENT FROM PARTIAL OBSERVATIONS

Abstract

It is of high interest for a company to identify customers expected to bring the largest profit in the upcoming period. Knowing as much as possible about each customer is crucial for such predictions. However, their demographic data, preferences, and other information that might be useful for building loyalty programs is often missing. Additionally, modeling relations among different customers as a network can be beneficial for predictions at an individual level, as similar customers tend to have similar purchasing patterns. We address this problem by proposing a robust framework for structured regression on deficient data in evolving networks with a supervised representation learning based on neural features embedding. The new method is compared to several unstructured and structured alternatives for predicting customer behavior (e.g. purchasing frequency and customer ticket) on user networks generated from customer databases of two companies from different industries. The obtained results show 4% to 130% improvement in accuracy over alternatives when all customer information is known. Additionally, the robustness of our method is demonstrated when up to 80% of demographic information was missing where it was up to several folds more accurate as compared to alternatives that are either ignoring cases with missing values or learn their feature representation in an unsupervised manner.