Customer Churn Model Research Articles

Credit card customers churn prediction by nine classifiers

Recently, losing credit card customers has been particularly serious. Using the found data set from kaggle website, this paper wants to help the bank manager by predicting for them to identify the customers who are likely to leave, so they can approach them in advance to offer them better services and sway their decisions. Nine classifiers are used to carry out model training and evaluation and finally develop credit card customers churn prediction. AdaBoost, XGBoost, Naive Bayes, Decision Tree, Random Forest, K-Nearest Neighbors, Support Vector Classifier, and Logistic Regression are the nine classifiers. The result shows that the credit card customer churn model can be predicted by all machine learning models. Among them, the XGBoost model performs exceptionally well, with a training accuracy of 100%, a test accuracy of 97%, and the highest F1 score of 92%. So it can be concluded that this model can be applied to relevant datasets for prediction in order to assist banks in better retaining their existing customers.

Customer churn classification through a weights and structure determination neural network

In today's corporate world, acquiring and keeping clients are the most important priorities. Every business’s market is expanding quickly, which is increasing the number of subscribers. Because neglect could result in a drop in profitability from a major standpoint, it has become imperative for service providers to limit churn rates. These days, identifying which customers are most likely to leave a business requires a lot less work thanks to machine learning. Taking this into account, a novel weights and structure determination (WASD) neural network has been built to meet the aforementioned challenge of customer churn classification, as well as to handle its unique characteristics. Motivated by the observation that WASD neural networks outperform conventional back-propagation neural networks in terms of slow training speed and trapping in a local minimum, we enhance the WASD algorithm's learning process with a new activation function for best adapting to the customer churn model. Superior performance and flexibility to problems are demonstrated in an experimental investigation using a dataset from a telecommunications provider.

Retracted: A Prediction Model of Customer Churn considering Customer Value: An Empirical Research of Telecom Industry in China

Retracted: A Prediction Model of Customer Churn considering Customer Value: An Empirical Research of Telecom Industry in China

Effective Implementation of Predictive Sales Analytics

Sales managers are unlikely to reap the benefits of implementing predictive analytics applications when salespeople show aversion to or lack understanding of these applications. For managers, it is essential to understand which factors mitigate or exacerbate these challenges. This article investigates these factors by studying the implementation of an application that predicts customer churn. Using 9.7 million transactions from a business-to-business company, the authors develop a predictive model of customer churn, implement it in a field experiment, and study its treatment effects using causal forests. Furthermore, the authors manipulate one specific mitigation strategy proposed by prior literature: the fostering of users’ realistic expectations regarding the accuracy of an algorithm. The results show that the effectiveness of the churn prediction application strongly depends on customer characteristics (most importantly the predicted churn probability and prior revenue) and salesperson characteristics (technology perceptions, abilities, and selling orientations). Fostering realistic expectations improves the effectiveness of the churn prediction only under very specific circumstances. Two follow-up stimuli-based experiments conceptually replicate key results of the field study. Therefore, this article helps build theory on predictive sales analytics and provides specific guidance to managers aiming to increase their return on analytics investments.

Development of a Customer Churn Model for Banking Industry Based on Hard and Soft Data Fusion

There has been an increase in customer churn over the past few years—customers decide not to continue purchasing products or services from an organization. Customers’ data lie in two categories: soft and hard. The term “hard data” refers to the records generated by various devices and programs, including but not limited to smartphones, computers, sensors, smart meters, fleet management systems, call detail records (CDRs), and consumer bank transaction data. On the other hand, information that is subject to interpretation and viewpoint is known as “soft data.” Fusing these two types of data leads to better customer behaviour analysis. This paper uses a supervised machine learning algorithm, namely a decision tree (DT), and the change mining method to model hard data. K-means clustering, an unsupervised machine learning algorithm, is also used along with the data preprocessing techniques. This paper also considers the Dempster-Shafer theory and other steps for soft data modelling. By fusing soft and hard data, the churn rate of customers compared with each other can be calculated. Besides, the customers’ banking data are leveraged for data modelling. The results show that the banking industry will gain a more dynamic and efficient customer relationship management system by using this model.

Machine Learning to Develop Credit Card Customer Churn Prediction

The credit card customer churn rate is the percentage of a bank’s customers that stop using that bank’s services. Hence, developing a prediction model to predict the expected status for the customers will generate an early alert for banks to change the service for that customer or to offer them new services. This paper aims to develop credit card customer churn prediction by using a feature-selection method and five machine learning models. To select the independent variables, three models were used, including selection of all independent variables, two-step clustering and k-nearest neighbor, and feature selection. In addition, five machine learning prediction models were selected, including the Bayesian network, the C5 tree, the chi-square automatic interaction detection (CHAID) tree, the classification and regression (CR) tree, and a neural network. The analysis showed that all the machine learning models could predict the credit card customer churn model. In addition, the results showed that the C5 tree machine learning model performed the best in comparison with the three developed models. The results indicated that the top three variables needed in the development of the C5 tree customer churn prediction model were the total transaction count, the total revolving balance on the credit card, and the change in the transaction count. Finally, the results revealed that merging the multi-categorical variables into one variable improved the performance of the prediction models.

Research on the construction of early warning model of customer churn on e-commerce platform

Abstract The construction of early warning model of customer churn in e-commerce platform can help e-commerce enterprises in China to strengthen the risk prevention of customer churn, improve efficiency of customer management and resolve the crisis of customer churn. Therefore, this paper analyses the definition basis and evaluation method of customer churn, and clarifies the function and content of early warning customer churn. By using the K-means clustering analysis of sample data, the early warning level of customer churn risk is categorized. By taking the established index system data as the input layer data of neural network, the early warning model of customer churn risk of e-commerce platform based on neural network is constructed. The test results show that the accuracy of the model is 100%, which can provide reference for the early warning research of customer churn risk in the e-commerce industry of China.

A Data-Driven Approach to Improve Customer Churn Prediction Based on Telecom Customer Segmentation

Numerous valuable clients can be lost to competitors in the telecommunication industry, leading to profit loss. Thus, understanding the reasons for client churn is vital for telecommunication companies. This study aimed to develop a churn prediction model to predict telecom client churn through customer segmentation. Data were collected from three major Chinese telecom companies, and Fisher discriminant equations and logistic regression analysis were used to build a telecom customer churn prediction model. According to the results, it can be concluded that the telecom customer churn model constructed by regression analysis had higher prediction accuracy (93.94%) and better results. This study will help telecom companies efficiently predict the possibility of and take targeted measures to avoid customer churn, thereby increasing their profits.

A Prediction Model of Customer Churn considering Customer Value: An Empirical Research of Telecom Industry in China

Customer churn will cause the value flowing from customers to enterprises to decrease. If customer churn continues to occur, the enterprise will gradually lose its competitive advantage. When the growth of new customers cannot meet the needs of enterprise development, the enterprise will fall into a survival dilemma. Focusing on the customer churn prediction model, this paper takes the telecom industry in China as the research object, establishes a customer churn prediction model by using a logistic regression algorithm based on the big data of high-value customer operation in the telecom industry, effectively identifies the potential churned customers, and then puts forward targeted win-back strategies according to the empirical research results. This paper analyzes the trends and causes of customer churn through data mining algorithms and gives the answers to such questions as how the customer churn occurs, the influencing factors of customer churn, and how enterprises win back churned customers. The results of this paper can better serve the practice of customer relationship management in the telecom industry and provide a reference for the telecom industry to identify high-risk churned customers in advance, enhance customer loyalty and viscosity, maintain “high-value” customers, and continue to provide customers with “value” and reduce the cost of maintaining customers.

An Empirical Study on Customer Churn Behaviours Prediction Using Arabic Twitter Mining Approach

With the rising growth of the telecommunication industry, the customer churn problem has grown in significance as well. One of the most critical challenges in the data and voice telecommunication service industry is retaining customers, thus reducing customer churn by increasing customer satisfaction. Telecom companies have depended on historical customer data to measure customer churn. However, historical data does not reveal current customer satisfaction or future likeliness to switch between telecom companies. The related research reveals that many studies have focused on developing churner prediction models based on historical data. These models face delay issues and lack timelines for targeting customers in real-time. In addition, these models lack the ability to tap into Arabic language social media for real-time analysis. As a result, the design of a customer churn model based on real-time analytics is needed. Therefore, this study offers a new approach to using social media mining to predict customer churn in the telecommunication field. This represents the first work using Arabic Twitter mining to predict churn in Saudi Telecom companies. The newly proposed method proved its efficiency based on various standard metrics and based on a comparison with the ground-truth actual outcomes provided by a telecom company.

Deep Learning as a Vector Embedding Model for Customer Churn

Abstract To face the tight competition in the telecommunication industry, it is important to minimize the rate of customers stopping their service subscription, which is known as customer churn. For that goal, an explainable predictive customer churn model is an essential tool to be owned by a telecommunication provider. In this paper, we developed the explainable model by utilizing the concept of vector embedding in Deep Learning. We show that the model can reveal churning customers that can potentially be converted back to use the previous telecommunication service. The generated vectors are also highly discriminative between the churning and loyal customers, which enable the developed models to be highly predictive for determining whether a customer would cease his/her service subscription or not. The best model in our experiment achieved a predictive performance of 81.16%, measured by the F1 Score. Further analysis on the clusters similarity and t-SNE plot also confirmed that the generated vectors are discriminative for churn prediction.

Research Model of Churn Prediction Based on Customer Segmentation and Misclassification Cost in the Context of Big Data

Enterprises have vast amounts of customer behavior data in the era of big data. How to take advantage of these data to evaluate custom forfeit risks effectively is a common issue faced by enterprises. Most of traditional customer churn predicting models ignore customer segmentation and misclassification cost, which reduces the rationality of model. Dealing with these deficiencies, we established a research model of customer churn based on customer segmentation and misclassification cost. We utilized this model to analyze customer behavior data of a telecom company. The results show that this model is better than those models without customer segmentation and misclassification cost in terms of the performance, accuracy and coverage of model.

Managing B2B customer churn, retention and profitability

It is now widely accepted that firms should direct more effort into retaining existing customers than to attracting new ones. To achieve this, customers likely to defect need to be identified so that they can be approached with tailored incentives or other bespoke retention offers. Such strategies call for predictive models capable of identifying customers with higher probabilities of defecting in the relatively near future. A review of the extant literature on customer churn models reveals that although several predictive models have been developed to model churn in B2C contexts, the B2B context in general, and non-contractual settings in particular, have received less attention in this regard. Therefore, to address these gaps, this study proposes a data-mining approach to model non-contractual customer churn in B2B contexts. Several modeling techniques are compared in terms of their ability to predict true churners. The best performing data-mining technique (boosting) is then applied to develop a profit maximizing retention campaign. Results confirm that the model driven approach to churn prediction and developing retention strategies outperforms commonly used managerial heuristics.

The Study and Realization of Customer-Churn Model Based on Date Mining in Telcom

Customer frequent churn is a serious problem in telecom. In the three major telecom operators, the competition is quite fierce. Owing to lack of a high-efficient prediction model ,the existing means effect is far from enterprise target. This paper proposes a combination model CPM based on constraint model, prediction model and mark model responsible for different job. Customer subdivision is vital for pertinent service further to reduce the rate of latent customers run off.

Experience, socialization and customer retention: Lessons from the dance floor

Experience and socialization are key factors in customer commitment and defection decisions. To study the effect of experience and social relationships on customer retention, we analyze a reality-mined co-presence network of health club members over a period of 4 years. Since central customers in the network have more social ties they will lose if they defect, we use centrality as a proxy for customer relationship switching costs. We find that long-standing customers do have a lower chance of renewing their contracts. However, in line with theoretical predictions (Burnham et al., Journal of the Academy of Marketing Science 31(2):109–126, 2003), the consumer’s centrality in the network (reflecting a social cost of defection) reduces customer churn rate. This study’s results indicate that the inclusion of social effects increases the predictive power of the customer churn model (Nitzan and Libai, Journal of Marketing 75(6):24–38, 2011), thus contributing to our understanding of the role social networks play in customer decisions.

Developing customer churn models for customer relationship management

Customer churn is the term used to describe customers who terminate their relationship with a company. Since churn means a loss of revenue to a company, it is important to identify customer churn and provide incentives to them in order to retain them to the company. This paper aims to design methodologies for the customer churn prediction problem in wireless telecommunications industry. Since the number of features in customer churn dataset is rather large, the performance of decision trees is significantly degraded if inappropriate features are selected and used for building decision trees. This paper finds features that have high effect on customer churn, and to design methodologies that will cope with high dimensionality of dataset and the customer churn prediction problem. This paper provides experimental results of a set of data mining schemes and feature selection methods for customer churn datasets.

Research on Customer Churn Model with Least Square Support Vector Machine

China telecommunications market is becoming more competitive, the operators are facing the severe costumer churn problem, and how to predict and effectively reduce the costumer churn directly concerns the survival and development of every operator. Therefore, the least squares support vector machine(LS-SVM) algorithm is adopted to build customer churn model, mainly including data cleaning, normalization, building forecasting model, model prediction, etc. The case study shows that the customer churn prediction using the LS-LSV has high precision, small error and remarkable effect.

Beyond Customer Churn: Generating Personalized Actions to Retain Customers in a Retail Bank by a Recommender System Approach

Customer churn may be a critical issue for banks. The extant literature on statistical and machine learning for customer churn focuses on the problem of correctly predicting that a customer is about to switch bank, while very rarely consid-ers the problem of generating personalized actions to improve the customer retention rate. However, these decisions are at least as critical as the correct identification of customers at risk. The decision of what actions to deliver to what customers is normally left to managers who can only rely upon their knowledge. By looking at the scientific literature on CRM and personalization, this research proposes a number of models which can be used to generate marketing ac-tions, and shows how to integrate them into a model embracing both the analytical prediction of customer churn and the generation of retention actions. The benefits and risks associated with each approach are discussed. The paper also describes a case of application of a predictive model of customer churn in a retail bank where the analysts have also generated a set of personalized actions to retain customers by using one of the approaches presented in the paper, namely by adapting a recommender system approach to the retention problem.

Employee churn prediction

Customer churn is a notorious problem for most industries, as loss of a customer affects revenues and brand image and acquiring new customers is difficult. Reliable predictive models for customer churn could be useful in devising customer retention plans. We survey and compare some major machine learning techniques that have been used to build predictive customer churn models. Employee churn (or attrition) closely related but not identical to customer churn is similarly painful for an organization, leading to disruptions, customer dissatisfaction and time and efforts lost in finding and training replacement. We present a case study that we carried out for building and comparing predictive employee churn models. We also propose a simple value model for employees that can be used to identify how many of the churned employees were “valuable”. This work has the potential for designing better employee retention plans and improving employee satisfaction.

Monitoring and backtesting churn models

The evaluation of the relationship with the customer and related benefits has become a key point for a company’s competitive advantage. The development of customer churn models has increased over the years. However, these models tend to be complex and used on demand, being developed every time the customer analysis is requested. The main contribution of this article is to demonstrate how a backtesting framework can be used for churn evaluation, enabling the validation and monitoring process for the generated churn models.