In fact, the total Profit from Online customers almost doubled since 1999. On the surface, banking online does seem to drive profitability, or at least, should be reason to explore the relationship further. Lazy 2 In order to explain the relationship between a customer and his/her profit, I have decided to view it in the frame of Regression Equations. If we find significant predictors of profitability, it could shed light on factors the marketing team should focus on to attempt and boost annual profit for the bank.
For a very holistic, simplified view of this relationship, we can consider to following “regression” type relationship: The idea of building this regression model is for the purpose of explanation more than prediction. We want to be able to explain what drives profitability. First Attempts at Building Regression Equations We start off trying to explain the drivers of profitability for the year 1999 with a very simple Linear Regression Model using all demographic variables as inputs, including whether the customer was an Online user and if they used Pilgrim’s online Byplay revive.