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Scorecard Development

Loyalty Square provides comprehensive predictive modeling solutions using state-of-the-art technologies. The approach includes a combination of statistical techniques and machine learning algorithms to provide incremental lift. We develop

  • Response Models
  • Activation Models
  • Incremental Sales Models
  • Churn and Prepayment Models
  • Forecasting Models

The approach broadly follows four steps:

  • Data Preparation: This step includes integration of data from several sources. For model development, dmographic, transactional, credit bureau and operations (e.g. call center data) information could be used.
  • Data Exploration: Before model development, it is critical to understand various variable inputs. Hence, univariate and bivariate analyses are carried out. These analyses are followed by missing value and capping treatments.
  • Model Development: Based on the business objective, appropriate modeling technique is decided. Various alternative models are developed and final model is selected based on statistical robustness, business requirement and ease of implementation.
  • Model Evaluation: The model is evaluated for its stability on various out-of-time samples. It's also a good practice to confirm that the model developed is compliant with regulatory requirements.

Once the model is implemented, a model tracking system needs to be deployed to monitor the performance of the model on a quarterly basis. A good model tracking system will alert model deterioration and will signal the need for redevelopment of the model.

 

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