Problem to solve
Imagine an e-commerce business that has millions of customers. These customers are people buying products on the website from time to time, getting those products delivered to their homes. The business is doing well, but the board of executives has decided to follow an action plan to maximize revenue.
This plan consists of offering the customers the option to subscribe to a premium plan, which will give them benefits like reduced prices, special deals, and so on. This premium plan is offered at a yearly price of $200, and the goal of this e-commerce business is, of course, to get the maximum number of customers to subscribe to this premium plan. Let's do some quick math to give us some motivation for building an AI to maximize the revenue of this business.
Let's say that this e-commerce business has 100 million customers. Now consider two strategies to convert the customers to the premium plan: a bad one, with a conversion rate of 1%, and...