SAS Marketing Optimization: Scenario Modeling Tip #4

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Scenario Modeling Tip #4: Use customer-level and household-level constraints to enforce follow-up on communications or similar dependencies between communications.

Example

You can enforce the dependency that states “If a customer receives communication A, then he must also receive communication B” by creating a customer-level constraint that has the appropriate constraint coefficients. You must first create two indicator measures and a calculated measure.

Suppose you want to enforce something like this? If a customer receives Comm04, then the customer must also receive Comm07.

This example creates a dependency that enforces the following rules:

• A customer cannot receive Comm04 without receiving Comm07.
• A customer can receive Comm07 without receiving Comm04.

To create the example:

1. Create two indicator measures, one for Comm04 and one for Comm07, as shown in Figure 1. Indicator Measures for Comm04 and Comm07. The indicator measure comm04_ind has a value of 1 for the communication Comm04 and a value of 0 for all other communications. Likewise, the indicator measure comm07_ind has a value of 1 for the communication Comm07 and a value of 0 for all other communications.
2. Create a calculated measure to subtract one indicator measure from the other, as shown in Figure 2. Create Calculated Measure. The calculated measure comm04_minus_comm07 has a value of 1 for the communication Comm04, a value of –1 for the communication Comm07, and a value of 0 for all other communications.

The calculated measure comm04_minus_comm07 (shown in Figure 3. Calculated Measures) can be used in customer-level constraints because it uses only Communication measures.  A customer-level constraint can use an input data measure or a calculated measure, as long as the calculated measure is specific only to communications and not to customers.

3. Create a customer-level constraint by using the calculated measure comm04_minus_comm07 as the constraint measure. This constraint has a computation type of SUM, a constraint operator of At most, and a constraint limit of 0, as shown in Figure 4. Customer-Level Constraint to Enforce Dependency.

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Note: This post was adapted from Michelle Opp’s “Scenario Modeling Tips” document. For more information, see SAS Marketing Optimization User’s Guide.