Behavioral Modeling
Categories: Metrics, Accounting, Company Management
Forecasting individual and organizational spending activity based upon historical patterns.
Davin frequents several online shopping sites to purchase wine at an average price of $10 per bottle for his home and catering business that he runs with his girlfriend, Olga. One week, Davin submits an order for a bottle of Pappy Van Winkle 23yo bourbon for $2,000. The behavioral modeling algorithms employed by e-commerce platforms notice this change in pattern and hypothesize that Davin and Olga are either shifting their business model to a more upscale clientele, hosting a special one-time event, or celebrating their engagement.
On the checkout page, Davin sees several "Customers Also Bought…" links to products including wines from Screaming Eagle Winery, gift cards to Things Remembered, and subscriptions to TheKnot.com. In reality, Davin was planning on drowning his sorrows after Olga broke up with him in order to marry Tom, her high school sweetheart (and former QB for the Knots High Screaming Eagles) who now manages the Things Remembered store at the local mall. Davin doubled his order.
