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  • Pros Cons: Use Upsell/cross-Sell Models For Each Product Type

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    Abhinav Kimothi
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    The document compares two approaches to product recommendations: 1. The traditional upsell/cross-sell approach models each product independently using binary classification models. It is simple but has cold start and overcommunication issues. 2. The recommendation systems approach uses collaborative filtering to identify similar users/items. It builds sparse user-item matrices and uses similarity algorithms like cosine similarity or SVD. This approach is truer to user history but requires more training data.

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    Original Title

    Product Recommendation

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    The document compares two approaches to product recommendations: 1. The traditional upsell/cross-sell approach models each product independently using binary classification models. It is simple but has cold start and overcommunication issues. 2. The recommendation systems approach uses collaborative filtering to identify similar users/items. It builds sparse user-item matrices and uses similarity algorithms like cosine similarity or SVD. This approach is truer to user history but requires more training data.

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    13 views2 pages

    Pros Cons: Use Upsell/cross-Sell Models For Each Product Type

    Uploaded by

    Abhinav Kimothi
    The document compares two approaches to product recommendations: 1. The traditional upsell/cross-sell approach models each product independently using binary classification models. It is simple but has cold start and overcommunication issues. 2. The recommendation systems approach uses collaborative filtering to identify similar users/items. It builds sparse user-item matrices and uses similarity algorithms like cosine similarity or SVD. This approach is truer to user history but requires more training data.

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    of 2

    Traditional Approach

    Use upsell/cross-sell models for each product type

    Suggested Data Performance


    Modeling Dataset Observation Point Target Definition Model Scoring
    Sources window
    Customer Profile option A – rolling 18
    information option A – 6 to 24 mob option A – current new
    month window at
    cohort True if product customers
    account opening 6 months from
    Bureau Data purchased, False if Binary Classification
    observation point
    option B – 6 month product not purchased
    Customer option B – current
    active on-books option B – 6 months
    Behavior/Transaction active portfolio
    before current date*
    data
    * to capture seasonality, 12-month
    rolling portfolio with replacement
    can be considered

    * Needs to be performed independently for each product


    * Assumes sufficient data for each product purchase

    Pros Cons
    • Simple to execute and understand • Cold start problem – needs sufficient
    data
    • Helpful when marketing is independent
    for each product • Risk of marketing overcommunication

    • Doesn’t prioritize within products

    Note : Binary classification can be switched to Multilevel classification by changing the target definition from True/False to
    actual product purchased. This addresses the problem of prioritization within products
    Recommendation Systems Approach
    Use item-item/user-user collaborative filtering

    Suggested Data Item Purchase


    Sparse Matrix Algorithm Scoring
    Sources Indicator
    Customer Profile
    information Purchase indicator in item x user for item
    last X months based recommendation
    Bureau Data Similarity based
    or (Cosine/Pearson/Jacard
    Customer Algorithm generated
    ian)
    Behavior/Transaction for item/user
    Purchase amount in
    data last X months SVD approach
    user x item for user
    based recommendation
    Product attributes

    Pros Cons
    • True to user history and product • Requires sufficient item and user data
    characteristics for training

    • Addresses cold-start problem is new


    user data is limited

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