1. CHAID Analysis for Surveys
Analysis
- Most survey answers have categorized values instead of continuous values.
- Finding out the statistical relationship in this kind of data is a challenge.
2. CHAID Analysis for Customer Profiling
Profiling
- Based on historical customer data, CHAID Analysis can be used to analyze all characteristics within the file.
- For example, product/service purchased, the dollar amount spent, major demographics, and demography of the customers, and so on.
- A blueprint can be produced to provide an understanding of the customer profile: strong or weak sales of products/services; active or inactive customers; factors affecting customers’ decisions or preferences, and so on.
- Such a customer profile will give the Sales & Marketing Team a clear picture of which type of person is most likely to buy the products and services based on factual purchase history, geo-demographics, and lifestyle attributes.
3. CHAID Analysis for Customer Targeting
Customer Targetting
- Recruiting new customers via direct contact (phone or mail) is a time-consuming and costly effort.
- For most products or services, the hit rate is less than 1%. That means, in order to get a new customer, over one hundred contacts are required.
- By mapping the current customer list to a general population database (e.g., SMR Residential Database that contains 12 million listed households), CHAID Analysis can find the household clusters that have much higher incidence rates than the average.
- By concentrating on these household clusters, the actual hit rate can be dramatically raised. The result is “Fewer phone calls or mail pieces with higher sales returns!”.
