The Influence of Customer Churn and Acquisition on Value Dynamics of Social Neighbourhoods

  • Authors:
  • Przemysław Kazienko;Piotr Bródka;Dymitr Ruta

  • Affiliations:
  • Institute of Computer Science, Wrocław University of Technology, Wrocław, Poland 50-370 and BT Innovate, British Telecom Group, Intelligent Systems Research Centre (ISRC), Ipswich, UK IP ...;Institute of Computer Science, Wrocław University of Technology, Wrocław, Poland 50-370;BT Innovate, British Telecom Group, Intelligent Systems Research Centre (ISRC), Ipswich, UK IP5 3RE

  • Venue:
  • WSKS '09 Proceedings of the 2nd World Summit on the Knowledge Society: Visioning and Engineering the Knowledge Society. A Web Science Perspective
  • Year:
  • 2009

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Abstract

The customers of modern telecommunication service providers implicitly create an interactive social network of individuals, which both depend on and influence each other through various complex social relationships grown on friendship, shared interests, locality, etc. While delivering services on the individual basis, the social network effects exerted from customer-to-customer interactions remain virtually unexplored and unexploited. The focus of the paper is on customer churn and acquisition, where social neighbourhood effects are widely ignored yet may play a vital role in revenue protection. The key assumption made is that a value loss or gain of a churning or new customer extends beyond the revenue stream and directly affect interaction within local neighbourhoods. This influence is evaluated experimentally by direct measurements of the total neighbourhood value of the churning customer taken before and after the churn event.