Predictive modeling of consumer financial behavior using supervised segmentation and nearest-neighbor matching

USRE42577E1 · kind E1 · reissue

Assignee

• Kuhuro Investments AG, L.L.C. · US

Inventors

• Matthias Blume · San Diego, US
• Michael A. Lazarus · San Diego, US
• Larry Peranich · San Diego, US
• Frederique Vernhes · Encinitas, US
• William R. Caid · San Diego, US
• Ted E. Dunning · San Diego, US
• Gerald S. Russell · San Diego, US
• Kevin Sitze · San Diego, US

Key dates

• Filing date: Mar 22, 2010
• Grant date: Jul 26, 2011
• Expiry date: Mar 22, 2030

Classification

• Technology area (CPC —): General

Abstract

Predictive modeling of consumer financial behavior, including determination of likely responses to particular marketing efforts, is provided by application of consumer transaction data to predictive models associated with merchant segments. The merchant segments are derived from the consumer transaction data based on co-occurrences of merchants in sequences of transactions. Merchant vectors represent specific merchants, and are aligned in a vector space as a function of the degree to which the merchants co-occur more or less frequently than expected. Supervised segmentation is applied to merchant vectors to form the merchant segments. Merchant segment predictive models provide predictions of spending in each merchant segment for any particular consumer, based on previous spending by the consumer. Consumer profiles describe summary statistics of each consumer's spending in the merchant segments, and across merchant segments. The consumer profiles include consumer vectors derived as summary vectors of selected merchants patronized by the consumer. Predictions of consumer behavior are made by applying nearest-neighbor analysis to consumer vectors, thus facilitating the targeting of pr…