CLV & Cohort Analysis

Propensity Scoring to Lift CLV

Use propensity scores and uplift modeling to target customers who are most likely to be incrementally influenced by your marketing. Shift from response rate to true causal lift to grow CLV efficiently.

A propensity score is the probability of receiving a treatment ______ observed covariates.

given

versus

ignoring

despite

It summarizes many covariates into a single score representing treatment likelihood.. It summarizes many covariates into a single score representing treatment likelihood..

In marketing, targeting by uplift focuses on customers with the largest ______ effect.

placebo

incremental

observational

seasonal

Uplift modeling seeks the difference in outcomes with versus without treatment, not just high baseline response.. Uplift modeling seeks the difference in outcomes with versus without treatment, not just high baseline response..

Matching or weighting on propensity scores aims to ______ covariates between treated and control groups.

discard

amplify

balance

duplicate

Balanced groups reduce confounding bias and approximate randomized comparisons.. Balanced groups reduce confounding bias and approximate randomized comparisons..

Inverse probability weighting uses weights of 1/PS for treated and 1/(1−PS) for controls to create a ______ sample.

pseudo‑randomized

clustered

overfit

undersampled

These weights reweight observations so covariates are balanced in expectation.. These weights reweight observations so covariates are balanced in expectation..

A key assumption for valid causal estimates is ______: every unit has a non‑zero chance of treatment and control.

post‑treatment adjustment

unit homogeneity

perfect collinearity

overlap (positivity)

Without overlap, comparisons rely on extrapolation and become unstable.. Without overlap, comparisons rely on extrapolation and become unstable..

Propensity methods cannot remove bias from ______ confounders.

synthetic

instrumented

measured

unobserved

They address imbalance in observed variables only; hidden factors can still bias results.. They address imbalance in observed variables only; hidden factors can still bias results..

To avoid bias, do not include variables that are affected by the treatment; these are called ______ variables.

post‑treatment

instrumental

collider‑free

pre‑treatment

Adjusting for post‑treatment variables can block part of the causal path or introduce collider bias.. Adjusting for post‑treatment variables can block part of the causal path or introduce collider bias..

A common way to evaluate uplift targeting quality is with the ______ curve or its Qini coefficient.

ROC

uplift

PR

calibration

These summarize incremental gain as you target higher predicted uplift segments.. These summarize incremental gain as you target higher predicted uplift segments..

Optimizing for CLV with propensity scores typically uses an outcome like ______ rather than clicks.

pixel fires

views per session

impressions

revenue or margin over a horizon

Aligning the target with value ensures the model selects customers who drive profitable lift.. Aligning the target with value ensures the model selects customers who drive profitable lift..

When PS is extremely close to 0 or 1, a robust practice is to apply ______ or trimming to stabilize estimates.

duplication

reverse scoring

weight caps

noisy labels

Capping extreme weights reduces variance from near‑deterministic assignment.. Capping extreme weights reduces variance from near‑deterministic assignment..

Starter

You’ve got the core ideas—reinforce balancing, overlap, and why unobserved confounding is a risk.

Solid

Well done—apply matching/weighting and validate with uplift curves or Qini.

Expert!

Superb—optimize on CLV outcomes, cap extreme weights, and avoid post‑treatment bias in production.

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