With Business Dynamics
models(BDM), we refer to time series
models that are tailor-made to capture business dynamics such as the impact of pricing, media marketing, distribution channels, etc., and how that affects the whole aspect of the business. The models can thus be used to take business insights to a whole new level.
Mathematical models are commonly used as an aid in business decisions today, such as
- Predicting future sales
- Customer Chur
- New customers
- Impact of competitors
- Budget planning
- Pricing Dynamics
- Marketing mix models (MMM)
- Multi-Touch AttMulti-Touch Attribution (MTA)
- Demand forecasting
- Impact of branding
Individually they add value, but by it is only looking at a subset of the problem, they are not able to account for everything that is going on in the business, nor do they allow for expressing all the unique business dynamics for a specific business. A business dynamics model
is a superset of all these different models and more. Thus one can construct a model that focuses on the full business perspective.
Say we want to model for customer churn, for simplicity, we assume it consists of media investments and pricing, and based on that one can figure out how to minimize customer churn.