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Customer Propensity Scoring

Business Need

Identify customers most likely to churn, upgrade, or make a purchase within the next 30 days to enable targeted marketing campaigns and improve customer retention rates.

Solution Overview

This solution uses Abacus.AI's predictive modeling capabilities to score customer propensity across multiple behavioral dimensions:

Step 1: Connect to Data Source

  • Data Source: Customer interaction data is ingested from Azure Storage containers using our native connector
  • Data Structure: Raw data includes customer profiles, transaction history, support interactions, product usage metrics, and engagement events
  • Update Cadence: Daily incremental loads capture the most recent customer behaviors

Step 2: Feature Engineering

  • Feature Groups: Transform raw data into predictive features using Abacus feature groups
  • Engineered Features: Recency-frequency-monetary (RFM) scores, engagement velocity, product adoption rates, support ticket frequency, and behavioral change indicators
  • Temporal Features: Rolling window aggregations (7-day, 30-day, 90-day) capture short and long-term trends
💡Pro Tip

Feature engineering is critical for propensity models. Focus on behavioral change indicators (e.g., declining login frequency, reduced feature usage) rather than just static attributes.

Step 3: Build Classification Model

Using the Predictive Modeling use case, a binary classification model is trained to predict customer propensity (e.g., likely to churn: yes/no). The platform automatically:

  • Handles class imbalance through sampling techniques
  • Selects optimal algorithms (gradient boosting, neural networks)
  • Performs hyperparameter tuning
  • Generates feature importance rankings

Step 4: Generate Predictions

Daily batch predictions score the entire customer base, assigning each customer a propensity score (0-100) and risk segment (low, medium, high).

Step 5: Export Results

Predictions are written back to Azure Storage in a format compatible with the client's CRM and marketing automation tools.

How It's Used in Practice

The propensity scoring system integrates seamlessly into existing customer engagement workflows:

Daily Scoring Pipeline:

  • Ingests previous day's customer activity from Azure Storage
  • Generates propensity scores for all active customers
  • Segments customers into risk/opportunity tiers
  • Exports results to Azure Storage for downstream consumption

Campaign Integration:

  • Marketing teams import scores into their campaign management platform
  • High-propensity customers receive targeted retention offers
  • Low-engagement customers are enrolled in re-engagement campaigns
  • Sales teams prioritize outreach based on upgrade propensity scores

Key Outcomes

Key achievements:

📈 6% increase in retention

Proactive outreach to high-churn-risk customers

⏱️ Timely scoring capability

Identify changes in customer patterns fast

Additional Information