An extended support vector machine forecasting framework for customer churn in e-commerce

Abstract

In order to accurately forecast and prevent customer churn in e-commerce, a customer churn forecasting framework is established through four steps. First, customer behavior data is collected and converted into data warehouse by extract transform load (ETL). Second, the subject of data warehouse is established and some samples are extracted as train objects. Third, alternative predication algorithms are chosen to train selected samples. Finally, selected predication algorithm with extension is used to forecast other customers. For the imbalance and nonlinear of customer churn, an extended support vector machine (ESVM) is proposed by introducing parameters to tell the impact of churner, non-churner and nonlinear. Artificial neural network (ANN), decision tree, SVM and ESVM are considered as alternative predication algorithms to forecast customer churn with the innovative framework. Result shows that ESVM performs best among them in the aspect of accuracy, hit rate, coverage rate, lift coefficient and treatment time. This novel ESVM can process large scale and imbalanced data effectively based on the framework.