Customer churn prediction in telecommunication industry using data certainty

Source of Publication

Journal of Business Research


© 2018 Elsevier Inc. Customer Churn Prediction (CCP) is a challenging activity for decision makers and machine learning community because most of the time, churn and non-churn customers have resembling features. From different experiments on customer churn and related data, it can be seen that a classifier shows different accuracy levels for different zones of a dataset. In such situations, a correlation can easily be observed in the level of classifier's accuracy and certainty of its prediction. If a mechanism can be defined to estimate the classifier's certainty for different zones within the data, then the expected classifier's accuracy can be estimated even before the classification. In this paper, a novel CCP approach is presented based on the above concept of classifier's certainty estimation using distance factor. The dataset is grouped into different zones based on the distance factor which are then divided into two categories as; (i) data with high certainty, and (ii) data with low certainty, for predicting customers exhibiting Churn and Non-churn behavior. Using different state-of-the-art evaluation measures (e.g., accuracy, f-measure, precision and recall) on different publicly available the Telecommunication Industry (TCI) datasets show that (i) the distance factor is strongly co-related with the certainty of the classifier, and (ii) the classifier obtained high accuracy in the zone with greater distance factor's value (i.e., customer churn and non-churn with high certainty) than those placed in the zone with smaller distance factor's value (i.e., customer churn and non-churn with low certainty).

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