How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel
-
Upload
excel-master-series -
Category
Education
-
view
1.678 -
download
3
description
Transcript of How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel
![Page 1: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/1.jpg)
How To Predict If a Prospect Will Buy With Logistic Regression in Excel
http://blog.excelmasterseries.com/
![Page 2: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/2.jpg)
What Is Logistic Regression?
● Logistic Regression is used to calculate the probability of an event occurring ● Logistic Regression is used when the dependent variable in a regression (Y) is binary (can only be 1 or 0)● Marketers use Logistic Regression to create quality scores that calculate the probability of a prospect buying
http://blog.excelmasterseries.com/
![Page 3: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/3.jpg)
An Example of Marketing Use of Logistic Regression
We have historic customer data for the following customer attributes for each past prospect: 1) Whether or not the prospect purchased 2) Prospect’s age and gender
http://blog.excelmasterseries.com/
![Page 4: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/4.jpg)
Available Data On Past Prospects
![Page 5: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/5.jpg)
Use the Excel Solver To Calculate the Predictive Equation
![Page 6: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/6.jpg)
To Solve for the Predictive Equation P(X),You Need To Solve for L (the Logit)
![Page 7: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/7.jpg)
You Will Use the Excel Solver to Solve for “Solver Decision Variables” (A, B, and Constant) Which Cause the Predictive
Equation P(X) To Be As Accurate As Possible
![Page 8: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/8.jpg)
As Before Running the Solver, Create the Following Data Columns on a Spread Sheet
![Page 9: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/9.jpg)
The Fundamental Basis for Logistic Regression Is Solving For The Above Equation
http://blog.excelmasterseries.com/
![Page 10: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/10.jpg)
The Excel Solver finds “Solver Decision Variables” (A, B, and Constant) that maximize the sum of the last column
![Page 11: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/11.jpg)
The Solver Dialogue Box
http://blog.excelmasterseries.com/
![Page 12: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/12.jpg)
The Solver Finds the Solver Decision Variables (A, B, and Constant) that Optimize the Predictive Equation as Above
http://blog.excelmasterseries.com/
![Page 13: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/13.jpg)
You May Have To Adjust the Solver Constraints To Find the Most Accurate Predictive Equation
http://blog.excelmasterseries.com/
![Page 14: How To Accurately Predict If Your Prospect WIll Buy Using Logistic Regression in Excel](https://reader030.fdocuments.us/reader030/viewer/2022020122/549d2feeb479599b318b4937/html5/thumbnails/14.jpg)