• Title/Summary/Keyword: Churn

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A Methodology of Customer Churn Prediction based on Two-Dimensional Loyalty Segmentation (이차원 고객충성도 세그먼트 기반의 고객이탈예측 방법론)

  • Kim, Hyung Su;Hong, Seung Woo
    • Journal of Intelligence and Information Systems
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    • v.26 no.4
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    • pp.111-126
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    • 2020
  • Most industries have recently become aware of the importance of customer lifetime value as they are exposed to a competitive environment. As a result, preventing customers from churn is becoming a more important business issue than securing new customers. This is because maintaining churn customers is far more economical than securing new customers, and in fact, the acquisition cost of new customers is known to be five to six times higher than the maintenance cost of churn customers. Also, Companies that effectively prevent customer churn and improve customer retention rates are known to have a positive effect on not only increasing the company's profitability but also improving its brand image by improving customer satisfaction. Predicting customer churn, which had been conducted as a sub-research area for CRM, has recently become more important as a big data-based performance marketing theme due to the development of business machine learning technology. Until now, research on customer churn prediction has been carried out actively in such sectors as the mobile telecommunication industry, the financial industry, the distribution industry, and the game industry, which are highly competitive and urgent to manage churn. In addition, These churn prediction studies were focused on improving the performance of the churn prediction model itself, such as simply comparing the performance of various models, exploring features that are effective in forecasting departures, or developing new ensemble techniques, and were limited in terms of practical utilization because most studies considered the entire customer group as a group and developed a predictive model. As such, the main purpose of the existing related research was to improve the performance of the predictive model itself, and there was a relatively lack of research to improve the overall customer churn prediction process. In fact, customers in the business have different behavior characteristics due to heterogeneous transaction patterns, and the resulting churn rate is different, so it is unreasonable to assume the entire customer as a single customer group. Therefore, it is desirable to segment customers according to customer classification criteria, such as loyalty, and to operate an appropriate churn prediction model individually, in order to carry out effective customer churn predictions in heterogeneous industries. Of course, in some studies, there are studies in which customers are subdivided using clustering techniques and applied a churn prediction model for individual customer groups. Although this process of predicting churn can produce better predictions than a single predict model for the entire customer population, there is still room for improvement in that clustering is a mechanical, exploratory grouping technique that calculates distances based on inputs and does not reflect the strategic intent of an entity such as loyalties. This study proposes a segment-based customer departure prediction process (CCP/2DL: Customer Churn Prediction based on Two-Dimensional Loyalty segmentation) based on two-dimensional customer loyalty, assuming that successful customer churn management can be better done through improvements in the overall process than through the performance of the model itself. CCP/2DL is a series of churn prediction processes that segment two-way, quantitative and qualitative loyalty-based customer, conduct secondary grouping of customer segments according to churn patterns, and then independently apply heterogeneous churn prediction models for each churn pattern group. Performance comparisons were performed with the most commonly applied the General churn prediction process and the Clustering-based churn prediction process to assess the relative excellence of the proposed churn prediction process. The General churn prediction process used in this study refers to the process of predicting a single group of customers simply intended to be predicted as a machine learning model, using the most commonly used churn predicting method. And the Clustering-based churn prediction process is a method of first using clustering techniques to segment customers and implement a churn prediction model for each individual group. In cooperation with a global NGO, the proposed CCP/2DL performance showed better performance than other methodologies for predicting churn. This churn prediction process is not only effective in predicting churn, but can also be a strategic basis for obtaining a variety of customer observations and carrying out other related performance marketing activities.

Determinants of Customers Churn in Emerging Telecom Markets: A Study Of Indian Cellular Subscribers

  • Kavita, Pathak;Rastogi, Sanjay
    • Journal of Global Scholars of Marketing Science
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    • v.17 no.4
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    • pp.91-111
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    • 2007
  • Marketing is said to be a zero sum game i.e. each gain of customer for a firm is always at the expense of some other firm's customers. Therefore in a marketplace churn is a natural occurrence. Churn in Indian telecom market is among the highest in growing telecom markets. By using binary logistics regression analysis based models based covering a sample of 822 Indian telecom subscribers; this paper attempts to examine the determinants of churn. The future churn is found to be dependent on satisfaction level of the customer with the service provider, attitude and loyalty of the customer variables, intended churn (i.e. intention to churn) and current loyalty (defined as intention to recommend) and distraction (i.e. intention to experiment).

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A MapReduce-based Artificial Neural Network Churn Prediction for Music Streaming Service

  • Chen, Min
    • International Journal of Computer Science & Network Security
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    • v.22 no.1
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    • pp.55-60
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    • 2022
  • Churn prediction is a critical long-term problem for many business like music, games, magazines etc. The churn probability can be used to study many aspects of a business including proactive customer marketing, sales prediction, and churn-sensitive pricing models. It is quite challenging to design machine learning model to predict the customer churn accurately due to the large volume of the time-series data and the temporal issues of the data. In this paper, a parallel artificial neural network is proposed to create a highly-accurate customer churn model on a large customer dataset. The proposed model has achieved significant improvement in the accuracy of churn prediction. The scalability and effectiveness of the proposed algorithm is also studied.

Analysis to Customer Churn Provoker's Roles Using Call Network of a Telecom Company (소셜 네트워크 분석을 기반으로 한 이동통신 잠재고객 이탈에 대한 연구)

  • Chun, Heuiju;Leem, Byunghak
    • The Korean Journal of Applied Statistics
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    • v.26 no.1
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    • pp.23-36
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    • 2013
  • In this study, we investigate how churn customers (who play a central connector or broker role) affect other customers' churn in their call networks with ego-network analysis using call data of a mobile telecom company in Korea. As a result of investigating Reciprocal Network, we found a relationship of attrition among churn customers. Churn provokers who influence other customers' attrition exist in customer churn networks. The characteristics of churn provokers is that they play a central connector and broker role in their groups. The proportion of churn provokers increases and the churn provoker's influence increases because the network is a reciprocal one.

Customer Retention Strategies of Domestic Wireless Telecommunication Service Providers at the Introduction of MNP (번호 이동성 시행 하에서 국내 이동통신 사업자들의 고객 유지 전략)

  • Yang, Hee-Tae;Choi, Mun-Kee
    • The Journal of Korean Institute of Communications and Information Sciences
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    • v.28 no.2B
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    • pp.157-169
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    • 2003
  • The customer retention is one of major goals for telecommunication service providers as MNP(Mobile Number Portability) would be enforced soon. The purpose of this study is to construct a customer retention model by (1) extracting the statistically significant determinants that influence on the Out-bounding churn and In-bounding churn separately and (2) ranking the importance of sub-factors to minimize Out-bounding churn and to satisfy In-bounding churn. This model applies to domestic wireless telecommunication service providers and customer retention strategies are suggested based on the result.

Analysis of Economic Incentive for Price Discount Presupposing Churn-in (전환가입에 따른 가격할인의 경제적 유인 분석)

  • Song, Jae-Do
    • Journal of the Korean Operations Research and Management Science Society
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    • v.34 no.2
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    • pp.55-75
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    • 2009
  • Price discounts presupposing churn-in are important tools of competition in many industries such as mobile telecommunication services and newspaper. In this case, consumers can get discount only through changing the provider. For analyzing this kind of competitions, we should consider the incentive of utilizing iterative switching. Hence, in this paper, we consider multi-stage equilibrium and can find that equilibria are different from one stage discount. In particular, when consumers' decisions are for maximizing multi-stage utility, discounts can bring about churn-out as well as churn-in and firms lose the incentive of discounts.

Customer Churn Identifying Model Based on Dual Customer Value Gap

  • Hou, Lun;Tang, Xiaowo
    • Management Science and Financial Engineering
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    • v.16 no.2
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    • pp.17-27
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    • 2010
  • The customer churn and the forecast of customer churn have been important research topics for a long time in the academic domain of customer relationship management. The customer value is studied to construct a gap model based on dual customer values; a basic description of customer value is given, then the gaps between products and services in different periods for the customers and companies are analyzed. The main factors that influence the perceived customer value are analyzed to define the "recognized value gap" and a gap model for the dual customer value is constructed. Based on the dual customer gap a con-ceptual model to determine potential churn customers is proposed in the paper.

Churn Analysis for the First Successful Candidates in the Entrance Examination for K University

  • Kim, Kyu-Il;Kim, Seung-Han;Kim, Eun-Young;Kim, Hyun;Yang, Jae-Wan;Cho, Jang-Sik
    • Journal of the Korean Data and Information Science Society
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    • v.18 no.1
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    • pp.1-10
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    • 2007
  • In this paper, we focus on churn analysis for the first successful candidates in the entrance examination on 2006 year using Clementine, data mining tool. The goal of this study is to apply decision tree including C5.0 and CART algorithms, neural network and logistic regression techniques to predict a successful candidate churn. And we analyze the churning and nochurning successful candidates and why the successful candidates churn and which successful candidates are most likely to churn in the future using data from entrance examination data of K university on 2006 year.

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Feature Selection Effect of Classification Tree Using Feature Importance : Case of Credit Card Customer Churn Prediction (특성중요도를 활용한 분류나무의 입력특성 선택효과 : 신용카드 고객이탈 사례)

  • Yoon Hanseong
    • Journal of Korea Society of Digital Industry and Information Management
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    • v.20 no.2
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    • pp.1-10
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    • 2024
  • For the purpose of predicting credit card customer churn accurately through data analysis, a model can be constructed with various machine learning algorithms, including decision tree. And feature importance has been utilized in selecting better input features that can improve performance of data analysis models for several application areas. In this paper, a method of utilizing feature importance calculated from the MDI method and its effects are investigated in the credit card customer churn prediction problem with classification trees. Compared with several random feature selections from case data, a set of input features selected from higher value of feature importance shows higher predictive power. It can be an efficient method for classifying and choosing input features necessary for improving prediction performance. The method organized in this paper can be an alternative to the selection of input features using feature importance in composing and using classification trees, including credit card customer churn prediction.

Development of Prediction Model for Churn Agents -Comparing Prediction Accuracy Between Pattern Model and Matrix Model- (대리점 이탈예측모델 개발 - 동적모델(Pattern Model)과 정적모델(Matrix Model)의 예측적중률 비교 -)

  • An, Bong-Rak;Lee, Sae-Bom;Roh, In-Sung;Suh, Yung-Ho
    • Journal of Korean Society for Quality Management
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    • v.42 no.2
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    • pp.221-234
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    • 2014
  • Purpose: The Purpose of this study is to develop a model for predicting agent churn group in the cosmetics industry. We develope two models, pattern model and matrix model, which are compared regarding the prediction accuracy of churn agents. Finally, we try to conclude if there is statistically significant difference between two models by empirical study. Methods: We develop two models using the part of RFM(Recency, Frequency, Monetary) method which is one of customer segmentation method in traditional CRM study. In order to ensure which model can predict churn agents more precisely between two models, we used CRM data of cosmetics company A in China. Results: Pattern model and matrix model have been developed. we find out that there is statistically significant differences between two models regarding the prediction accuracy. Conclusion: Pattern model and matrix model predict churn agents. Although pattern model employed the trend of monetary mount for six months, matrix model that used the amount of sales per month and the duration of the employment is better than pattern model in prediction accuracy.