Ensembles of probability estimation trees for customer churn prediction

Authors:
Koen W. De Bock;Dirk Van den Poel
Affiliations:
Department of Marketing, Faculty of Economics and Business Administration, Ghent University, Ghent, Belgium;Department of Marketing, Faculty of Economics and Business Administration, Ghent University, Ghent, Belgium
Venue:
IEA/AIE'10 Proceedings of the 23rd international conference on Industrial engineering and other applications of applied intelligent systems - Volume Part II
Year:
2010

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Abstract

Customer churn prediction is one of the most important elements of a company's Customer Relationship Management (CRM) strategy. In this study, two strategies are investigated to increase the lift performance of ensemble classification models, i.e. (i) using probability estimation trees (PETs) instead of standard decision trees as base classifiers, and (ii) implementing alternative fusion rules based on lift weights for the combination of ensemble member's outputs. Experiments are conducted for four popular ensemble strategies on five real-life churn data sets. In general, the results demonstrate how lift performance can be substantially improved by using alternative base classifiers and fusion rules. However, the effect varies for the different ensemble strategies. In particular, the results indicate an increase of lift performance of (i) Bagging by implementing C4.4 base classifiers, (ii) the Random Subspace Method (RSM) by using lift-weighted fusion rules, and (iii) AdaBoost by implementing both.