Business judgment

Interview question

seniorlevel
15 minsuggested time
3Data scientist, ML engineer, Applied AI

A retention programme calls customers ranked by an uplift model. A holdout experiment on 10,000 customers (hypothetical, 1,000 per decile of predicted uplift) shows the incremental number of customers retained per 1,000 contacted, by decile: 60, 48, 38, 30, 22, 16, 11, 7, 4, 2. A retained customer is worth 400 in margin and a contact costs 12. The programme currently calls five deciles, reports a 32% return and is a success; the VP of Marketing proposes extending it to eight because "the return is positive". What do you recommend, and what else would you ask for before the decision is final?

Tests: Marginal versus average return in capacity and targeting decisions, deriving a stopping rule from break-even uplift, and handling the uncertainty of decile-level estimates and of fixed-capacity steps.

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