A firm that sells software services has been piloting a new product and has records of 200 customers who have either bought the services or decided not to. The average revenue from a sale is $2128 (Total Revenue/200), and average cost of sales effort is $2500 per customer (whether they buy or not). The firm developed a predictive model in hopes of being able to identify the top spenders in the future. The decile-wise lift charts for the validation set is shown in the Figure.

a) If the company begins working with a new set of 1000 leads to sell the same services, similar to the 200 in the pilot study, without any use of predictive modeling to target sales efforts, what is the estimated profit? Is it a profitable decision?

b) If the firm wants to keep at-least 50% profit margin (Total Net Profit/Total-Cost). How many deciles of customers should it try to sell the product?

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