A propensity model is a technique useful to predict the behaviour of a customer or prospect base.
Propensity models are often used to predict who’s more likely to respond to an offer, or on whose a firm has a higher probability of retaining when they’re likely to churn.
Typically a propensity model is applied to a database to score all customers or prospects. This can then be used to identify what are the products these people might be interested in, or whose people should have a higher priority when contacting about a certain product. It can also be used as part of lead scoring and other similar analysis.