Predicting subscriber dissatisfaction and improving retention in the wireless telecommunications industry

Authors:
M. C. Mozer;R. Wolniewicz;D. B. Grimes;E. Johnson;H. Kaushansky
Affiliations:
Dept. of Comput. Sci., Colorado Univ., Boulder, CO;-;-;-;-
Venue:
IEEE Transactions on Neural Networks
Year:
2000

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Abstract

We explore techniques from statistical machine learning to predict churn and, based on these predictions, to determine what incentives should be offered to subscribers to improve retention and maximize profitability to the carrier. The techniques include legit regression, decision trees, neural networks, and boosting. Our experiments are based on a database of nearly 47000 USA domestic subscribers and includes information about their usage, billing, credit, application, and complaint history. Our experiments show that under a wide variety of assumptions concerning the cost of intervention and the retention rate resulting from intervention, using predictive techniques to identify potential churners and offering incentives can yield significant savings to a carrier. We also show the importance of a data representation crafted by domain experts. Finally, we report on a real-world test of the techniques that validate our simulation experiments