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Author
Last Commit
Feb. 18, 2019
Created
Dec. 24, 2018

End-to-End Applied Data Science: Lead Scoring

Motivation

The purpose of this project is to provide an end-to-end example of working an enterprise-grade data science problem, from business understanding to model evaluation, by applying two different frameworks:

  • CoNVO to scope the problem and formulate a data science solution
  • CRISP-DM to iterate on a model-based solution

Since data and machine learning engineers are typically responsible for deployment, maintenance, and optimization of infrastructure and models, this project omits the Deployment phase of CRISP-DM.

This project is not without flaws - the argument could be stronger, costs and benefits could be more accurate, and the resulting model could perform better, but its level of detail is reflective of the effort required to to create a reproducible data science solution that is (1) well aligned with stakeholder expectations and (2) poised to deliver business value. We could continue to iterate and improve our results ad infinitum in the pursuit of the perfect solution but in the real world, we are constrained by budgets and so by time. It's clear that even if we had unlimited budget to refine the analysis and model, our early and fast efforts will likely be satisfactory enough to deploy a data solution, allowing us to move on and pursue a different project. From both business and engineering perspectives, it's generally best to start with the simplest thing that could possibly work, especially if it's relatively cheap to build.

Overview

This project uses the Bank Marketing Dataset published to the UCI Machine Learning Repository to demonstrate the scoping and implementation of a real-world data science project. The dataset's description on the UCI Machine Learning website states:

The classification goal is to predict if the client will subscribe a term deposit (variable y).

With a hypothetical business context and feedback from stakeholders regarding various aspects of a marketing problem, we can arrive at a more complete and operational description of our problem, based on the CoNVO framework:

Context

This Portuguese bank offers term deposits as a financial product offering to its existing customers as a means to provide capital for loan products. It is currently running a telemarketing campaign in which existing customers are pitched on the term deposit product during inbound customer service and outbound sales calls. The decision maker for this campaign is the director of marketing.

Needs

A tactical change in product strategy as a result of changing market conditions (lowered interest rates) requires additional budget resources to jumpstart a new campaign for a different financial product – mortgages. The bank figures that if it can improve its conversion rate with its current campaign, then it will be in a better position to spend the remaining budget more efficiently, leading to higher revenues and more funds available for the mortgage campaign.

The director of marketing is also interested in quantifying the effect of this modelling effort to ensure that data science efforts are making an impact and, if successful, making it easier to get buy in for allocate resources to data-driven efforts in the future.

Vision

We propose to create a lead scoring model that will rank customers according to a model score that indicates how likely customers are to invest in a term deposit. By focussing on the customers who are most likely to convert, the bank will earn more per marketing dollar spent on customer specialists who are pitching to customers. To this end, we will deliver a ranked list of contacts in an Excel spreadsheet that the director of marketing can hand off to her management team for operationalization.

Quantifying the impact of the campaign empirically will require the design prior to and execution of a controlled experiment when the campaign is deployed. Two weeks prior to model deployment, we’ll deliver a report outlining the experimental design and two weeks following the conclusion of the campaign, we’ll deliver a report summarizing the results.

Outcome

If the bank observes a significant increase in ROI as a result of the development and deployment of the lead scoring model, the engineering team will be tasked with integrating the model into a CRM system, making the deployment of future models faster and cheaper.

Key Insights

  • The conversion rate of the previous marketing campaign was 25%.

  • The conversion rate of the current marketing campaign is 11%.

  • A simple "domain-driven" model that chooses customers to target based on whether they converted in the last marketing campaign and chooses remaining customers randomly improved the current conversion rate by 250% - bringing the conversion rate of targeted customers to 39%.

  • A Naive Bayes model using only categorical features from the original training set improved the baseline conversion rate by 354% - bringing the conversion rate of targeted customers to 51%.

  • With the Naive Bayes model, targeting 6.6% of the population identifies ~30% of the respondents.

Project Structure

data

The data retrieved from the UCI Machine Learning Repository as well as training and test sets.

  • bank_additional/

  • train.csv

    • The dataset used for exploratory analysis to train machine learning models
  • test.csv

    • The dataset used to evaluate the optimal model

docs

Project documentation including the project context and scope, financial models, and an articulation of the solution. All of the documentation can also be found in this Google Drive folder.

  • 1-CoNVO.docx (view online in Google Docs)

    • A document describing the scope of the project - its Context, Needs, Vision and Outcome
  • 2-Problem Model.xlsx (view online in Google Sheets)

    • A spreadsheet model of the problem dynamics including costs, benefits, campaign conversion rates, and what-if scenarios
  • 3-Vision, Arguments, and Results.docx (view online in Google Docs)

    • A document articulating the refinement of the problem, establishing definitions, values, and an operational measure of success / effectiveness

models

Serialized model objects with optimized hyperparameters.

  • experiment-1-model.pk
    • The scikit-learn implementation of Naive Bayes which was the optimal model of the project

notebooks

Exploratory analysis and experiment code.

  • 1.0-exploratory-analysis.ipynb

    • Exploratory analysis of existing marketing data
  • 2.0-experiment-1-baseline-vs-ml.ipynb

    • The first experiment designed to evaluate the difference in performance between the baseline domain-driven model and a set of machine learning models
  • 3.0-experiment-2-feature-engineering

    • Prototyping code for new features derived from existing variables included in the marketing dataset
  • 3.1-experiment-2-model.ipynb

    • The second experiment designed to evaluate the effectiveness of derived features with the best performing model from experiment #1
  • 4.0-model-evaluation.ipynb

    • Evaluation of the best performing model on the held-out test set

support

A supporting library that encapsulates ML model objects and provides tools for evaluation and hyperparameter tuning. Most of this code will be moved to a standalone library, except for:

  • experiments/

    • Code modules for experiment code that includes pipelines and derived features
  • parameters.py

    • Values for e.g. costs, benefits, and proportion of targeted customers from the Problem Model workbook

Dependencies

  • numpy==1.15.2
  • pandas==0.23.4
  • matplotlib==2.2.2
  • seaborn==0.9.0
  • scikit-learn==0.20.0

License

The MIT License (MIT)

Copyright (c) 2018 Calvin De Lima

Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the "Software"), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions:

The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.

THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.