Toward a hybrid data mining model for customer retention

The prevention of subscriber churn through customer retention is a core issue of Customer Relationship Management (CRM). By minimizing customer churn a company maximizes its profit. This paper proposes a hybridized architecture to deal with customer retention problems. It does so not only through predicting churn probability but also by proposing retention policies. The architecture works in two modes: learning and usage.

In the learning mode, the churn model learner seeks potential associations from the subscriber database. This historical information is used to form a churn model. This mode also calls for a policy model constructor to use the attributes identified in the churn model to divide all ‘churners’ into distinct groups. The policy model constructor is also responsible for developing a policy model for each churner group. In the usage mode, a churn predictor uses the churn model to predict the churn probability of a given subscriber. When the churn model finds that the subscriber has a high churn probability the policy model is used to suggest specific retention policies.

This study’s experiments show that the churn model has an evaluation accuracy of approximately eighty-five percent. This suggests that policy model construction represents an interesting and important technique in investigating the characteristics of churner groups. Furthermore, this study indicates that understanding the relationships between churns is essential in creating effective retention policy models for dealing with ‘churners’.     

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

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.     

Combined rough set theory and flow network graph to predict customer churn in credit card accounts

Customer churn has become a critical issue, especially in the competitive and mature credit card industry. From an economic and risk management perspective, it is important to understand customer characteristics in order to retain customers and differentiate high-quality credit customers from bad ones. However, studies have not yet adequately introduced rules based on customer characteristics and churn forms of original data. This study uses rough set theory, a rule-based decision-making technique, to extract rules related to customer churn; then uses a flow network graph, a path-dependent approach, to infer decision rules and variables; and finally presents the relationships between rules and different kinds of churn. An empirical case of credit card customer churn is also illustrated. In this study, we collect 21,000 customer samples, equally divided into three classes: survival, voluntary churn and involuntary churn. The data from these samples includes demographic, psychographic and transactional variables for analyzing and segmenting customer characteristics. The results show that this combined model can fully predict customer churn and provide useful information for decision-makers in devising marketing strategy.     

Improving customer attrition prediction by integrating emotions from client/company interaction emails and evaluating multiple classifiers

Predicting customer churn with the purpose of retaining customers is a hot topic in academy as well as in today’s business environment. Targeting the right customers for a specific retention campaign carries a high priority. This study focuses on two aspects in which churn prediction models could be improved by (i) relying on customer information type diversity and (ii) choosing the best performing classification technique. (i) With the upcoming interest in new media (e.g. blogs, emails, ...), client/company interactions are facilitated. Consequently, new types of information are available which generate new opportunities to increase the prediction power of a churn model. This study contributes to the literature by finding evidence that adding emotions expressed in client/company emails increases the predictive performance of an extended RFM churn model. As a substantive contribution, an in-depth study of the impact of the emotionality indicators on churn behavior is done. (ii) This study compares three classification techniques – i.e. Logistic Regression, Support Vector Machines and Random Forests – to distinguish churners from non-churners. This paper shows that Random Forests is a viable opportunity to improve predictive performance compared to Support Vector Machines and Logistic Regression which both exhibit an equal performance.     

基于并行C4.5的铁路零散白货客户流失预测研究

为了提高铁路零散白货客户流失预测的准确性和高效性,根据铁路零散白货客户的流失特征,提出了基于CDL模型的客户流失识别方法,在此基础上,针对数据量大的问题,提出了基于Hadoop并行框架的C4.5决策树客户流失预测模型。通过仿真实验,证明该模型具有较好的准确性和预测能力,并且随着样本数量的增加,Hadoop并行框架的效率得到了明显的提升,且不影响客户流失预测模型的准确性和预测能力。     

服务号码捆绑特征在离网预测系统中的应用

用户流失问题是电信运营商面临的亟待解决的问题,针对不同的场景,业界研究开发了多个用户离网预测系统。服务号码捆绑指用户在使用运营商服务期间,与银行、电商、便利店等第三方服务提供商通过绑定手机号产生联系。通过研究发现用户在服务存续期间普遍会绑定多种第三方服务提供商,这些商家会不定时给用户推送短信,当用户即将流失时,多数用户会逐渐取消这类服务的绑定。因此,服务号码捆绑特征对于离网用户的甄别起到了重要的作用。采用随机森林算法构建离网预测模型,利用逻辑回归算法对服务号码捆绑特征进行降维,并加入模型,进行离网用户分析,从而辅助决策者制订相应的客户维挽策略,降低客户离网率。实验结果表明,服务号码软捆绑特征能够提高系统的分析预测能力。     

Estimating the effect of word of mouth on churn and cross-buying in the mobile phone market with Markov logic networks

Much has been written about word of mouth and customer behavior. Telephone call detail records provide a novel way to understand the strength of the relationship between individuals. In this paper, we predict using call detail records the impact that the behavior of one customer has on another customer's decisions. We study this in the context of churn (a decision to leave a communication service provider) and cross-buying decisions based on an anonymized data set from a telecommunications provider. Call detail records are represented as a weighted graph and a novel statistical learning technique, Markov logic networks, is used in conjunction with logit models based on lagged neighborhood variables to develop the predictive model. In addition, we propose an approach to propositionalization tailored to predictive modeling with social network data. The results show that information on the churn of network neighbors has a significant positive impact on the predictive accuracy and in particular the sensitivity of churn models. The results provide evidence that word of mouth has a considerable impact on customers' churn decisions and also on the purchase decisions, leading to a 19.5% and 8.4% increase in sensitivity of predictive models.     

Applying Bayesian Belief Network approach to customer churn analysis: A case study on the telecom industry of Turkey

In telecommunication industry, for many organizations, it is really important to take place in the market. As competition increases between companies, customer churn becomes a great issue to deal with by the telecommunication providers. For an effective churn management, companies try to retain their existing customers, instead of acquiring new ones. Previous researches focus on predicting the customers with a propensity to churn in telecommunication industry. In this study, a model is constructed by Bayesian Belief Network to identify the behaviors of customers with a propensity to churn. The data used are collected from one of the telecommunication providers in Turkey. First, as only discrete variables are used in Bayesian Belief Networks, CHAID (Chi-squared Automatic Interaction Detector) algorithm is applied to discretize continuous variables. Then, a causal map as a base of Bayesian Belief Network is brought out via the results of correlation analysis, multicollinearity test and experts’ opinions. According to the results of Bayesian Belief Network, average minutes of calls, average billing amount, the frequency of calls to people from different providers and tariff type are the most important variables that explain customer churn. At the end of the study, three different scenarios that examine the characteristics of the churners are analyzed and promotions are suggested to reduce the churn rate.     

基于决策树的证券客户流失模型

描述了证券业客户流失分析的重要性,客户流失的定义,提出了影响客户流失的各种特征因素.然后根据CRM中的RFM模型,加入客户收益率指标,提出了证券行业客户流失分析的RFM-ROI模型.用决策树方法构建了客户流失分析模型,并提出了解决决策树剪枝问题的停止阈值方法.结果表明该模型能达到80.7%的准确率,具有较强的实用性.     

Calling communities analysis and identification using machine learning techniques

The analysis of social communities related logs has recently received considerable attention for its importance in shedding light on social concerns by identifying different groups, and hence helps in resolving issues like predicting terrorist groups. In the customer analysis domain, identifying calling communities can be used for determining a particular customer’s value according to the general pattern behavior of the community that the customer belongs to; this helps the effective targeted marketing design, which is significantly important for increasing profitability. In telecommunication industry, machine learning techniques have been applied to the Call Detail Record (CDR) for predicting customer behavior such as churn prediction. In this paper, we pursue identifying the calling communities and demonstrate how cluster analysis can be used to effectively identify communities using information derived from the CDR data. We use the information extracted from the cluster analysis to identify customer calling patterns. Customers calling patterns are then given to a classification algorithm to generate a classifier model for predicting the calling communities of a customer. We apply different machine learning techniques to build classifier models and compare them in terms of classification accuracy and computational performance. The reported test results demonstrate the applicability and effectiveness of the proposed approach.     

基于贝叶斯网络的电信客户流失预测分析

电信客户流失分析常用的数据挖掘方法有自动聚类、决策树和人工神经网络,它们是采用数据本身来训练模型的,没有利用先验知识。电信客户流失是由客户心理、服务质量和对手竞争等诸多复杂的因素造成的,利用这些已有的先验知识,可以提高预测的精度。该文根据先验知识选取分析变量,采集样本数据,通过贝叶斯网络的结构学习和参数学习,建立客户流失模型并进行客户流失趋势预测,取得了比标准数据集更准确的结果,该结果和决策树方法的预测结果相比还具有较大的优势,说明贝叶斯网络是分析客户流失等不确定性问题的有效工具。     

Knowledge discovery on RFM model using Bernoulli sequence

The objective of this paper is to introduce a comprehensive methodology to discover the knowledge for selecting targets for direct marketing from a database. This study expanded RFM model by including two parameters, time since first purchase and churn probability. Using Bernoulli sequence in probability theory, we derive out the formula that can estimate the probability that one customer will buy at the next time, and the expected value of the total number of times that the customer will buy in the future. This study also proposed the methodology to estimate the unknown parameters in the formula. This methodology leads to more efficient and accurate selection procedures than the existing ones. In the empirical part we examine a case study, blood transfusion service, to show that our methodology has greater predictive accuracy than traditional RFM approaches.     

GSM churn management by using fuzzy c-means clustering and adaptive neuro fuzzy inference system

Churn management is important and critical issue for Global Services of Mobile Communications (GSM) operators to develop strategies and tactics to prevent its subscribers to pass other GSM operators. First phase of churn management starts with profile creation for the subscribers. Profiling process evaluates call detail data, financial information, calls to customer service, contract details, market details and geographic and population data of a given state. In this study, input features are clustered by x-means and fuzzy c-means clustering algorithms to put the subscribers into different discrete classes. Adaptive Neuro Fuzzy Inference System (ANFIS) is executed to develop a sensitive prediction model for churn management by using these classes. First prediction step starts with parallel Neuro fuzzy classifiers. After then, FIS takes Neuro fuzzy classifiers’ outputs as input to make a decision about churners’ activities.     

基于贝叶斯网络的推理在移动客户流失分析中的应用

移动客户流失分析系统在数据挖掘的基础上,实现了客户流失模型的管理应用。其中关键的环节是根据先验知识的因果推理和基于贝叶斯网络的因果推理进行流失客户的分析,挖掘导致流失的因素,从而辅助市场经营人员制订相应的策略。实验说明,基于贝叶斯网络推理的知识可以不断修正先验知识,获得对客户流失等问题的正确认识。     

Customer segmentation based on survival character

Customer Segmentation is an increasingly pressing issue in today’s over-competitive commercial area. More and more literatures have researched the application of data mining technology in customer segmentation, and achieved sound effectives. But most of them segment customer only by single data mining technology from a special view, rather than from systematical framework. Furthermore, one of the key purposes of customer segmentation is customer retention. Although previous segment methods may identify which group needs more care, it is unable to identify customer churn trend for taking different actions. This paper focus on proposing a customer segmentation framework based on data mining and constructs a new customer segmentation method based on survival character. The new customer segmentation method consists of two steps. Firstly, with K-means clustering arithmetic, customers are clustered into different segments in which customers have the similar survival characters (churn trend). Secondly, each cluster’s survival/hazard function is predicted by survival analyzing, the validity of clustering is tested and customer churn trend is identified. The method mentioned above has been applied to a dataset from China Telecom, which acquired some useful management measures and suggestions. Some propositions for further research is also suggested.     

基于PMML的移动通信客户流失模型交换

移动通信领域迫切需要在地理分布的经营分析系统之间交换标准的数据挖掘模型。尽管预测模型标记语言已经成为数据挖掘模型交换格式的业界标准,但并没形成可用的框架来指导标准交换模型的生产过程。该文提出了支持挖掘模型交换和移动通信客户流失分析的决策树算法框架。利用该框架构建了流失预警系统,并使用模拟客户数据验证了其有效性。对标准交换模型进行了适当扩展,以支持对移动通信数据更加有效的流失分析。     

A recommender system to avoid customer churn: A case study

A major concern for modern enterprises is to promote customer value, loyalty and contribution through services such as can help establish a long-term, honest relationship with customers. For purposes of better customer relationship management, data mining technology is commonly used to analyze large quantities of data about customer bargains, purchase preferences, customer churn, etc. This paper aims to propose a recommender system for wireless network companies to understand and avoid customer churn. To ensure the accuracy of the analysis, we use the decision tree algorithm to analyze data of over 60,000 transactions and of more than 4000 members, over a period of three months. The data of the first nine weeks is used as the training data, and that of the last month as the testing data. The results of the experiment are found to be very useful for making strategy recommendations to avoid customer churn.     

CIAS:一个客户智能分析数据挖掘平台

CIAS是将数据挖掘技术应用在CRM领域而开发的一个客户智能分析平台。它将数据挖掘划分为三个层次：算法层、商业逻辑层、行业应用层，构建了一种新型的数据挖掘系统体系结构。CIAS的商业逻辑层包括交叉销售、客户响应、客户细分、客户流失、客户利润，五个商业模型。通过在商业模型和挖掘算法之间建立映射，CIAS使得用户直接利用商业模型解决问题，而不是面对复杂的算法，从而提供友好、易用的数据挖掘应用环境。     

CRM at a pay-TV company: Using analytical models to reduce customer attrition by targeted marketing for subscription services

The early detection of potential churners enables companies to target these customers using specific retention actions, and subsequently increase profits. This analytical CRM (Customer Relationship Management) approach is illustrated using real-life data of a European pay-TV company. Their very high churn rate has had a devastating effect on their customer base. This paper first develops different churn-prediction models: the introduction of Markov chains in churn prediction, and a random forest model are benchmarked to a basic logistic model.The most appropriate model is subsequently used to target those customers with a high churn probability in a field experiment. Three alternative courses of marketing action are applied: giving free incentives, organizing special customer events, obtaining feedback on customer satisfaction through questionnaires. The results of this field experiment show that profits can be doubled using our churn-prediction model. Moreover, profits vary enormously with respect to the selected retention action, indicating that a customer satisfaction questionnaire yields the best results, a phenomenon known in the psychological literature as the ‘mere-measurement effect’.