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This paper addresses the unique challenges of transaction propensity prediction in B2B e-commerce by replacing traditional SMOTE-based data augmentation with a method utilizing Diverse Counterfactual Explanations (DiCE) to generate more representative minority class samples. The authors adapt the PyPARC piecewise affine classification framework to produce calibrated propensity probabilities, allowing for effective customer segmentation into actionable risk tiers. Evaluated on extensive longitudinal data, the proposed framework outperforms SMOTE-based methods, achieving a precision of 93.1% at a decision threshold of 0.8, significantly enhancing marketing effectiveness and ROI.
Counterfactual explanations can dramatically improve minority class sample generation, leading to a 9.2 percentage point boost in precision for B2B transaction predictions.
Transaction propensity prediction in B2B e commerce presents unique challenges distinct from B2C contexts, primarily due to the heterogeneous procurement behaviors of organizational entities, which violate SMOTE's implicit assumption of within class feature homogeneity. Specifically, B2B buyers exhibit multi modal procurement cycles that render linear interpolation between minority class samples structurally invalid, producing synthetic data that does not represent real purchasing behavior. This paper introduces a production deployed propensity modeling framework designed to address these complexities through two primary contributions. First, we replace conventional SMOTE based augmentation with a synthetic data generation approach leveraging Diverse Counterfactual Explanations (DiCE). This method produces minority class samples with superior distributional fidelity compared to SMOTE, as validated through quantitative proximity analysis and UMAP cluster visualization. Second, we adapt the PyPARC piecewise affine classification framework to generate calibrated propensity probabilities, facilitating the interpretable segmentation of customers into actionable risk tiers. Evaluated on two years of longitudinal data from a large scale B2B e commerce platform with a 1 to 9 class imbalance ratio, the proposed architecture achieves 93.1% precision at a decision threshold of 0.8, a 9.2 percentage point improvement over SMOTE based baselines at the same threshold (83.9%), and a 26.1 point improvement over SMOTE at threshold 0.7 (66.04%), demonstrating consistent superiority across operating points. These results demonstrate the framework's efficacy in enabling high precision marketing campaigns with significant improvements in customer activation and return on investment.