A diffusion model for churn prediction based on sociometric theory

Abstract

Churn prediction has received much attention in the last decade. With the evolution of social networks and social network analysis tools in recent years, the consideration of social ties in churn prediction has proven promising. One possibility is to use energy diffusion models to model the spread of influence through a social network. This paper proposes a novel churn prediction diffusion model based on sociometric clique and social status theory. It describes the concept of energy in the diffusion model as an opinion of users, which is transformed to user influence using the derived social status function. Furthermore, a novel diffusion model prediction scheme applicable to a single user or a small subset of users is described: the Targeted User Subset Churn Prediction Scheme. The scheme allows fast churn prediction using limited computing resources. The diffusion model is evaluated on a real dataset of users obtained from the largest Slovenian mobile service provider, using the F-measure and lift curve. The empirical results show a significant improvement in prediction accuracy of the proposed method compared with the basic spreading activation technique (SPA) diffusion model. More specifically, our approach outperforms a basic SPA diffusion model by 116 % in terms of lift in the fifth percentile.