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[FEAT] Add a Graph to visualize trends #683
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enhancement
New feature or request
Frontend
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Features for MVP to get product Market Fit
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tesla809
added
enhancement
New feature or request
Frontend
Issues pertaining to the Front end team
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Features for MVP to get product Market Fit
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Apr 30, 2020
Looking Nice! Just Remember all subjective parameters are subjective and as
guidance tool to help people in the context of this pandemia, they are
important from a psychology scope, we as I see it need to provide a guide
to assure people there is no need to worry medically based on temperature
and heart rate trends which can be shown to the doctor, as glucose diary
for diabetic patients. Do not forget how people feel are emotions which
have a relationship with your general health but not always, mostly with
unknown non linear correlation, and a huge interindividual variability
which is less the case for temperature and heart rate observing in periods
of days or weeks.
Sven
Op vr 1 mei 2020 13:15 schreef Adham Abo Hasson <[email protected]>:
… If I understand the issue right, we already have this for both TEMPERATURE
and Behavioral
We can add it with the TEMPERATURE or make it separate
[image: Screenshot 2020-05-01 at 13 13 04]
<https://user-images.githubusercontent.com/55054963/80801765-ab6ef480-8bad-11ea-8c21-86c03e3a872a.png>
[image: Screenshot 2020-05-01 at 13 13 10]
<https://user-images.githubusercontent.com/55054963/80801774-af9b1200-8bad-11ea-80c0-58dea73fdbed.png>
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I feel like we should add some more detail about action items to take with this story, otherwise it's difficult to deduce what needs to be completed and when this issue is "done" / ready for a PR. Otherwise we should probably close this and make it a bit more pointed. |
FYI
…---------- Forwarded message ---------
From: Data Science Briefings <[email protected]>
Date: Mon, 18 May 2020 at 10:49
Subject: Data Science Briefings #116: RFM Analysis Revisited
To: <[email protected]>
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[image: DataMiningApps Logo] Data Science Briefings
*Updates on the latest news, trends, techniques, tools and our research in
data mining and analytics*
In this Newsletter
- RFM Analysis Revisited
- News and Research Updates from Our Group
- Your Reading List: Hand-picked Data Science Links from the Web
Editorial
Dear fellow data scientists, analytics lovers, and friends,
We hope you and yours are remaining safe and sound.
The RFM framework has already been popular since its introduction by
Cullinan in 1977. It’s a well-known and well-developed measurement
framework used in marketing across different industries such as banking,
insurance, Telco, non-profit, travel, on-line retailers, and even
government. It consists of a set of metrics to monitor customers’ behaviour
so as to develop suitable customer relationship management or CRM
strategies. In this issue’s feature article, we revisit this popular
framework and take a look at how you can use it in machine learning.
We hope you enjoy this issue of Data Science Briefings. We always like to
receive feedback as well as suggestions or contributions. Just reply to
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Prof. dr. Seppe vanden Broucke
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RFM Analysis Revisited
*Contributed by: Bart Baesens
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Seppe vanden Broucke
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This article is based on our BlueCourses course Customer Lifetime Value
Modeling
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.
Although RFM analysis is sometimes referred to as a poor man’s approach to
CLV analysis, we think it’s a very good way to start doing customer
lifetime (CLV) modeling. As always in machine learning, it’s not because
it’s simple, that it is necessarily bad. The RFM framework has already been
popular since its introduction by Cullinan in 1977. It’s a well-known and
well-developed measurement framework used in marketing across different
industries such as banking, insurance, Telco, non-profit, travel, on-line
retailers, and even government. It consists of a set of metrics to monitor
customers’ behaviour so as to develop suitable customer relationship
management or CRM strategies. Do note that the RFM framework focusses on
existing customers, instead of prospects.
Basically, the RFM famework summarizes the purchasing habits of consumers
according to 3 dimensions only. It essentially builds upon the Pareto
principle which states “For many events, roughly 80% of the effects come
from 20% of the causes”. In our case, the events correspond to purchases
and the causes to customers. Or, translated to an RFM setting: 20% of your
customers are likely to generate 80% of your profit. Using the RFM
framework, we will try to find out which are those customers who buy or
bought recently, frequently and for high monetary values?
*Recency* measures the time since the most recent purchase transaction.
*Frequency* measures the total number of purchase transactions in the
period examined. And finally, *monetary* measures the value of purchases
within the period examined. The combination of these three variables
provides a very useful perspective on the value of your current customer
portfolio.
Let’s now zoom in on each of the variables of the RFM framework into some
more detail.
We start with recency. As with any RFM variable, it can be operationalized
in various ways. Examples are: how long ago since the customer made a
purchase? This results into a continuous variable. As an alternative, we
can measure it in a binary way as: did the customer make a purchase during
the previous day, week, month or year? Finally, we can also define it in
an exponential way. More specifically, we can define recency as e^(-γt).
Here t is the time-interval between two consecutive purchases. γ is a
user-specified parameter which is typically rather small, for example 0.02.
Note that by using this procedure, recency is always a number between 0 and
1. The figure below shows that recency indeed decreases when the
time-interval gets bigger.
<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvd3d3LmRhdGFtaW5pbmdhcHBzLmNvbVwvd3AtY29udGVudFwvdXBsb2Fkc1wvMjAyMFwvMDVcL3JlY2VuY3kxLnBuZyJ9/>
The parameter γ determines how fast the recency decreases. For larger
values of γ, recency will decrease quicker with time and vice versa. But
how do you choose γ, you might ask? Well, you could choose γ such that
recency has to be equal to 0.01 after 180 days for example. Then γ is
-log(0.01)/180.
Frequency is the second variable of the RFM framework. As said, it
measures how frequently the customer buys. A first way of measuring it is
by calculating the average number of purchases per unit of time, such as
per month over the last year. Some frequency calculations will also take
the tenure or lifetime of the customer into account and measure it as the
total number of purchases divided by the number of months since the first
purchase. According to most research, including the research conducted by
myself, the frequency variable is usually the most important of the RFM
framework.
Also the monetary variable can be operationalized in various ways. It can
be calculated as the average, maximum or minimum purchase value during the
past year. It can also be measured as the most recent value of a
purchase. Or, we can again take into account the tenure of the customer
and consider the total lifetime spending. Trends can also be looked at.
These features usually turn out to be very predictive in any analytical CLV
setting. Trends summarize the historical evolution of a variable in
various ways. Trends can be computed in an absolute or relative way as
follows:
- absolute trend: (M_t – M_(t-x)) / x
- relative trend: (M_t – M_(t-x)) / M_(t-x)
When computing trends, it is important to consider what happens if the
denominator becomes 0. Recent values can also be assigned a higher
weighted. Trends can also be featurized using time series techniques, such
as ARIMA or GARCH models.
Interactions between the RFM variables can also be taken into account.
These can be 2-way interactions, 3-way interactions, etc. Obviously, the
thing with interactions is that they usually make a predictive model more
difficult to interpret. Hence, be very careful when considering them. My
practical advice is to only include them when they really add to the
predictive performance of your analytical model. Typically, you will also
observe correlations between the R, F and M variables. A commonly observed
correlation is the one between the frequency and monetary variables. This
correlation is not necessarily problematic, but being aware of it is
already very important.
We are now ready to start operationalizing the RFM variables such that we
can work with them in a meaningful way. The idea here is to create an RFM
score which can then be used for customer segmentation, churn prediction or
any other CLV related analytical modeling task. Obviously, due to
continuously changing customer behavior and the external environment, this
RFM score should be updated regularly. Creating an RFM score requires a
combination of both analytical skills and business experience. Let’s
elaborate a bit further on this.
Here you can see a very simple example of creating an RFM score.
<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvd3d3LmRhdGFtaW5pbmdhcHBzLmNvbVwvd3AtY29udGVudFwvdXBsb2Fkc1wvMjAyMFwvMDVcL3JmbTEuanBnIn0/>
We basically created 3 bins for each of the RFM variables. The bins are
ordinally ordered. Let’s quickly look at some of them. For Frequency, bin
1 contains all customers who did at most 1 transaction during the previous
month, bin 2 the customers who did 2 to 5 transactions and bin 3 the
customers who did 6 or more transactions. The other variables are binned
in a similar way. Let’s say we have a customer who belongs to bin 2 for
recency, to bin 1 for frequency and to bin 2 for monetary. We can then
summarize this into an RFM score of 2 + 1 + 2 or 5. As said, this
procedure can then be used for customer segmentation or to create variables
for analytical models.
<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvd3d3LmRhdGFtaW5pbmdhcHBzLmNvbVwvd3AtY29udGVudFwvdXBsb2Fkc1wvMjAyMFwvMDVcL3JmbTIuanBnIn0/>
A common way of creating RFM bins is by creating quintiles. This can be
done using either independent or dependent sorting. Let’s start with
independent sorting. In this case, we sort the data by recency and create
5 quintiles which are labelled as R1, R2 until R5. The quintile R1 then
represents the 20% most ancient buyers. We then sort by Frequency and also
create 5 quintiles. F1 represents the customers that buy least
frequently. Finally, we do the same for the monetary variable, sort and
create 5 quintiles: M1 until M5 with M1 representing the lowest average
spenders. The final RFM score can then be used as a cluster indicator or
even as a predictor for an analytical model. Note that the best customers
are typically assumed to be in quintile 5 for each RFM variable or cluster
555. These represent the customers that have purchased most recently, most
frequently and have spent the most money.
Dependent sorting works in a strict sequential way. It starts with the
Recency variable first and creates the 5 quintiles. Each Recency quintile
is then further binned into 5 Frequency quintiles. Each resulting RF bin
is then further binned into 5 quintiles based on the Monetary variable.
As with independent sorting, the final RFM score can be used as a cluster
indicator or variable in a predictive analytical CLV model. Note that
scientifically, to the best of my knowledge, it is not possible to state
which one is best: independent or dependent sorting.
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The RFM variables can be used as input variables for various analytical CLV
models such as churn prediction, response modeling, customer segmentation
and obviously also CLV analytical models. The bottom table illustrates a
churn prediction data set which combines the RFM variables with other
customer specific information such as age, marital status, etc.
<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvd3d3LmRhdGFtaW5pbmdhcHBzLmNvbVwvd3AtY29udGVudFwvdXBsb2Fkc1wvMjAyMFwvMDVcL3JmbTQuanBnIn0/>
Let’s now zoom out of the original marketing context and do some out of the
box thinking. Essentially, recency quantifies the recency of an event,
frequency the frequency of events and monetary the impact, intensity or
reach of an event. Defining the RFM variables in this more general way,
opens up perspectives for their use in other settings. The RFM variables
are commonly used in fraud analytics. Think about credit card fraud as an
example. Here, R can refer to the recency of a transaction, F to the
frequency and M to the monetary value. In web analytics, the recency can
represent the recency of a web site visit, the frequency the frequency
thereof and the monetary variable can represent the duration of the visit.
In a social media setting, we can look at the recency of a post, the
frequency of posts and community size that is reached with the post, such
as followers, retweets, shares, etc.
Let’s conclude the discussion of the RFM framework with some closing
thoughts. A key advantage of the RFM framework is that it is simple and
easy to understand and calculate. It provides a compact and powerful
representation of customer behavior. We consider it to be an ideal
approach to build your first CLV models. Remember, when doing analytics it
is always wise to start off simple and then gradually sophisticate your
models.
*Do you also wish to contribute to Data Science Briefings? Shoot us an
e-mail (just reply to this one) and let’s get in touch!*
*Our friends at SAS are organizing two exciting online events:*
- 19th of May: Data Storytelling webinar
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At a time when understanding data is more critical than ever, data
scientists are in the unique position to influence and drive change through
data storytelling.
- 19th of June: TALKS of the GEEKS
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an amusing and interactive session on technical topics that determine the
data science landscape of today.
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How do you make sure a model works equally well for different groups of
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- Towards understanding glasses with graph neural networks
<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvZGVlcG1pbmQuY29tXC9ibG9nXC9hcnRpY2xlXC9Ub3dhcmRzLXVuZGVyc3RhbmRpbmctZ2xhc3Nlcy13aXRoLWdyYXBoLW5ldXJhbC1uZXR3b3JrcyJ9/>
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<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvd3d3Lm5wci5vcmdcLzIwMjBcLzA1XC8xM1wvODU0MDE0NDAzXC95b3VyLWJvc3MtaXMtd2F0Y2hpbmcteW91LXdvcmstZnJvbS1ob21lLWJvb20tbGVhZHMtdG8tbW9yZS1zdXJ2ZWlsbGFuY2U_dD0xNTg5NzkxMDIyMjcxIn0/>
“Employees were to install software called Hubstaff immediately on their
personal computers so it could track their mouse movements and keyboard
strokes, and record the webpages they visited.”
- Can AI Become Conscious?
<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvY2FjbS5hY20ub3JnXC9uZXdzXC8yNDQ4NDYtY2FuLWFpLWJlY29tZS1jb25zY2lvdXNcL2Z1bGx0ZXh0In0/>
Intelligence is about behavior. For example: what do you do in a new
environment in order to survive? Consciousness is not about behavior;
consciousness is about being.
- Understanding uncertainty: Visualising probabilities
<https://www.dataminingapps.com/sendpress/eyJpZCI6IjQzNiIsInJlcG9ydCI6IjYyOTE2IiwidmlldyI6InRyYWNrZXIiLCJ1cmwiOiJodHRwczpcL1wvcGx1cy5tYXRocy5vcmdcL2NvbnRlbnRcL3VuZGVyc3RhbmRpbmctdW5jZXJ0YWludHktdmlzdWFsaXNpbmctcHJvYmFiaWxpdGllcyJ9/>
Ian Short explores modern visualisation techniques and finds that the
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- This word does not exist
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KU Leuven
Department of Decision Sciences and Information Management
Naamsestraat 69
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--
Sven Van Poucke, MD, PhD
Ziekenhuis Oost-Limburg
Schiepse Bos 6
3600 Genk
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Labels
enhancement
New feature or request
Frontend
Issues pertaining to the Front end team
MVP
Features for MVP to get product Market Fit
Prerequisites
Summary
Based on ROADMAP-TO-MVP
Why is a graph useful
Being able to see the trend of temperature and heart rate change over time is SUPER useful for the doctor.
Task for graph:
Add a graph or some easy visual that shows trends of temperature and heart rate over time.
The trend of these two measurements is SUPER important to assess the possibility of being affected by COVID, based on @DocMusher#9988 experience.
Make it look CLEAN and LOGICAL since this is an ESSENTIAL feature that doctor and user will interact with.
Use the best library you see fit.
The trend is your friend.
Motivation
**Why are we doing this? **
Being able to see the trend of temperature and heart rate change over time is SUPER useful for the doctor.
**What use cases does it support? **
Hitting specifications for MVP to be usable in the field by Belgian doctor DocMusher.
See: ROADMAP-TO-MVP
**What is the expected outcome? **
The user and doctor can see the trends of Pulse and temperature over time in a clear and intuitive way. Make it look CLEAN and LOGICAL since this is an ESSENTIAL feature that doctor and user will interact with.
Possible Alternatives
None, this is a core feature specified by first field user to reach MVP state.
Additional Context
Based on ROADMAP-TO-MVP
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