Abstract— Customer churn is a business term used to describe the loss of customer. It describes those customers or clients who leave or switch to competitors. In the telecommunication industry, customers have multiple choices of services and they frequently switch from one service to another. In this competitive market, customers demand best products and services at low prices, while service providers constantly focus on getting hold of as their business goals. So that’s why there is very higher rate of customer churn in telecommunications industry experiences an average of 30-35% annual churn rate. The purpose of this paper is to propose an efficient Customer Churn Prediction Model based on classification techniques, which will help the telecommunication company to predict the customer churn rate to know about which customers are loyal to them. I. INTRODUCTION Data mining is very famous technique for churn prediction and it is used in many fields. Data mining refers to the process of analyzing data in order to determine patterns and their relationships. It is an advanced technique which goes deep into data and uses machine learning algorithms to automatically shift through each record and variable to uncover the patterns and information that may have been hidden. There is a lot of work done in data mining for churn prediction in different fields. It is used to solve the customer churn problem by identifying the customer behavior from large number of customer data. Problem Statement: Customer churn refers to the periodic loss of customers in an organization. Customer churn is a very common problem of every organization all over the world. In the competitive market it’s a very big challenge for any organization to retai... ... middle of paper ... ...iningMart: Proceedings of the workshop on data mining and …, 2005 – Citeseer [16] Mozer M. C., Wolniewicz R., Grimes D.B., Johnson E., Kaushansky H. Predicting Subscriber Dissatisfaction and Improving Retention in the Wireless Telecommunication Industry. IEEE Transactions on Neural Networks, Special issue on Data Mining and Knowledge Representation (2000). [17] Mutanen,Teemu. Customer churn analysis- a case study, Research Report VTTR0118406, March 15, 2006. [18] De Oliveira, J.V., Pedrycz W. (editors) (2007) Advances in Fuzzy Clustering and its Applications, John Wiley & Sons Ltd. [19] J. Hadden, A. Tiwari, R. Roy, and D. Ruta. Churn Prediction using Complaints Data. International Journal of Intelligent Technology, 13:158{163, May 2006. [20] H. Van Khuu, H.-KieLee, and J.-Liang Tsai. “Machine learning with neural networks and support vector machines”, 2005.
Data mining is also capable of determining the Lifetime Value (LTV) of a customer which determines how long they are likely to stay and how profitable they will be during that time. Same as Best Buy, telecommunication companies are aware that not all customers are created equally. Creating a LTV for customers builds on what is known about current customers and extrapolates it into the future. According to the four analysts Drew, Mani, Betz, and Datta from Verizon laboratories their company is already integrating LTV into customer retainment decisions and its more advanced Gain in Lifetime Value (GLTV).
RBC Financial Group uses a customer relationship management (CRM) strategy that provides a variety of services for a variety of clients. The strategy allows for individual customers to trust RBC and develop a personal relationship with each and every client. One major factor that allows CRM to operate effectively is the use of technologies and analytics to help classify each client’s financial situation. These customer profitability-based techniques allowed RBC to categorize their clients into A, B, and C groups so that the sales teams could optimize their efforts in catering to these different clients. This strategy holds the following strengths: optimizing sales efforts to different customers, easily accessible electronic sales leads, centralized and standardized financial decisions, and building personalized and sustainable customer relationships. There are a few weaknesses to the system though including the complexity in predicting future positions of companies despite the use of analytics as well as the complexity in creating consistency when using these
Organizations and businesses are constantly vying for new and existing customers’ attention and business. In order to achieve this, marketing of products and or services are needed to advertise these to customers. One of the major ways that organizations and businesses acquire their information is through data mining. They create customer profiles from all of the information that they collect to create these profiles. These
In the past, Irontown Inc. has gone through the process of developing a short-term staffing plan and redeveloping their candidate assessment and selection procedures to better fill their customer service representative (CSR) positions. Now, they are wanting to develop a retention plan that will support their overall staffing strategy for their company. The new retention plan is vital because they have decided to retain their customer service department (CSD) internal, hopefully reducing their turnover rate by 20% per year over the next three years. If Irontown’s new retention program meets their objectives by the end of the first year, they are going to invest in a new CRM software program. Irontown’s HR department has requested the last 120 employees who left voluntarily to participate in an exit interview. They will collect data from these interviews, form focus groups, determine what the issues are, and then use this information to develop a retention plan that supports the overall staffing strategy of the company. While evaluating this case study, this author will take a look at the key and underlying issues, the facts that affect these issues, recommend a solution and a plan implementation, and conduct follow-ups.
Data mining refers to the use of data from big data source by using different tools in order to solve real time problems that include logistics management, scientific research, processing, financial decision making, retail, and medical research. The important use of data mining can increase the development in the information industry as well as providing benefits to the social cause
When doing business, the management need to be aware of the high employee turnover due to individualistic characteristic of employees. The company may have to take precaution that capable
Introduction. Customer loyalty is basically defined as a deep held commitment to re-buy or re-patronize a chosen product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior (Oliver, 1997). It is a main driver for customer retention, which, in its turn, represents a basic force that accumulates a customer base for the company. As the experience suggests, the presence of the customer base is a valuable asset, because a lot of statistical data and marketing researches have proved that it is harder and much more expensive to acquire a new customer rather than retain an existing one. In this aspect, any business without a focus on customer retention is left on market’s mercy: any market movements will affect the sales in a more intense manner. There is also a risk that your competitor may eventually satisfy the existing customer’s needs and take away a part of your market niche. Moreover, customer loyalty gives a sort of discretion to the company’s R&D policy and marketing strategy: you can try to introduce different features to your products, experiment with different types of ads, and no matter what the results would be, — the customers will stay stick to your production line. Of course, an organization does not have an absolute control over the loyalty of its customers, bec...
They suggest setting a churn benchmark. Then, use it as a guide for future growth.
In today’s world the term called as “ATTRITION” is familiar to each and every person working in the corporate world. Attrition or simply called as employee turnover refers to the reduction of work force in an organization due to resignations, retirement, sickness, or death. It is mostly unpredictable in nature. The cause of attrition can be voluntary as well as involuntary. Each industry has its own standards for acceptable attrition rates, and these rates are likely to differ between skilled and unskilled positions of employee. Since in every kind of organization there has been an expenses related with the training of new employee, any kind of employee turnover will lead ultimately to the monetary cost.
Customer retention has a positive relationship with the company’s profit as loyal passengers are less price sensitivity and they require less effort to communicate. Also, it is easier to obtain purchase from old customers compared to new customers in most cases (Shrestha, 2014). According to J.D. Power Report, (2015), airline companies that provide satisfactory services to gain customer loyalty will lead to improvement of return on investment, through the repurchasing of airline services.
...customers are going to respond in the future based on their past behavior as well as their segmented demographics.
However it is not important the loyal customer management would lead you to profits. Loyalty and profitability link can be advocated simultaneously. It can be achieved by maximizing and measuring CLV i.e. customer life value. Using CLV exemplar helps companies in making logical decisions about customers and various presumptions to retain and acquire, and additionally ordain the level of reserves that can be bleared on several micro-segments.
As pointed out by Singh (2006), customer satisfaction is important because, “satisfaction influences repurchase intentions whereas dissatisfaction has been seen as a primary reason for customer defection or discontinuation of purchase”.
Customer relationship management or CRM for short is a model for managing a company’s interactions with current and future customers. When CRM is utilized correctly it will increase profitability and customer loyalty, which are both very important to an organization. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support. Customer relationship management is very important in many ways to help a company become and stay successful. CRM can help businesses gain a competitive edge through communication, marketing, gathering customer information, social media and mobile technology. Customer relationship management is a continually evolving domain and now social media technologies have revolutionized the way businesses and consumers interact. (Choudhury & Harrigan, 2014) There are many benefits that come with implementing customer relationship management.
It’s essential that companies or businesses today listen to their customers. No company or business today can afford to disregard the importance of customer satisfaction and loyalty. Aren’t they the same thing? No, they are absolutely not and they are enormously different. “Customer satisfaction is a self-reported measure of how much customers ‘likes' a company and how happy they are with goods purchased or services obtained from the company. Customer loyalty, on the other hand, is a company-calculated metric of likelihood to purchase again or not defect to a competitor” (Klein, 2013).