Defection Detection Analysis Based on Time-Dependent Data

Past and current customer behavior is the best predicator of future customer behavior. This paper introduces a procedure on personalized defection detection and prevention for an online game site. The basic idea for our defection detection and prevention is adopted from the observation that potential defectors have a tendency to take a couple of months or weeks to gradually change their behavior (i.e. trim-out their usage volume) before their eventual withdrawal. For this purpose, we suggest a SOM (Self-Organizing Map) based procedure to determine the possible states of customer behavior from past behavior data. Based on this representation of the state of behavior, potential defectors are detected by comparing their monitored trajectories of behavior states with frequent and confident trajectories of past defectors. The key feature of this study includes a defection prevention procedure which recommends the desirable behavior state for the ext period so as to lower the likelihood of defection. The defection prevention procedure can be used to design a marketing campaign on an individual basis because it provides desirable behavior patterns for the next period. The experiments demonstrate that our approach is effective for defection prevention and efficient for defection detection because it predicts potential defectors without deterioration of prediction accuracy compared to that of the MLP (Multi-Layer Perceptron) neural network.