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Predicting time-to-churn of prepaid mobile telephone customers using social network analysis

Author

Listed:
  • Aimée Backiel

    (Katholieke Universiteit Leuven)

  • Bart Baesens

    (Katholieke Universiteit Leuven
    University of Southampton
    Vlerick, Leuven-Gent Management School)

  • Gerda Claeskens

    (Katholieke Universiteit Leuven)

Abstract

Mobile phone carriers in a saturated market must focus on customer retention to maintain profitability. This study investigates the incorporation of social network information into churn prediction models to improve accuracy, timeliness, and profitability. Traditional models are built using customer attributes, however these data are often incomplete for prepaid customers. Alternatively, call record graphs that are current and complete for all customers can be analysed. A procedure was developed to build the call graph and extract relevant features from it to be used in classification models. The scalability and applicability of this technique are demonstrated on a telecommunications data set containing 1.4 million customers and over 30 million calls each month. The models are evaluated based on ROC plots, lift curves, and expected profitability. The results show how using network features can improve performance over local features while retaining high interpretability and usability.

Suggested Citation

  • Aimée Backiel & Bart Baesens & Gerda Claeskens, 2016. "Predicting time-to-churn of prepaid mobile telephone customers using social network analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 67(9), pages 1135-1145, September.
    • Handle: RePEc:pal:jorsoc:v:67:y:2016:i:9:d:10.1057_jors.2016.8
    DOI: 10.1057/jors.2016.8
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    References listed on IDEAS

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    Cited by:

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    2. Shen, Ai-Zhong & Guo, Jin-Li & Wu, Guo-Lin & Jia, Shu-Wei, 2018. "The agglomeration phenomenon influence on the scaling law of the scientific collaboration system," Chaos, Solitons & Fractals, Elsevier, vol. 114(C), pages 461-467.
    3. Arturo Briseño & Bryan W. Husted & Jorge M. Rocha, 2019. "Methodological problems in research on the diffusion of management practices," Contaduría y Administración, Accounting and Management, vol. 64(1), pages 11-12, Enero-Mar.
    4. Johannes Haupt & Stefan Lessmann, 2020. "Targeting customers under response-dependent costs," Papers 2003.06271, arXiv.org, revised Aug 2021.
    5. Koen W. de Bock & Arno de Caigny, 2021. "Spline-rule ensemble classifiers with structured sparsity regularization for interpretable customer churn modeling," Post-Print hal-03391564, HAL.
    6. Zihayat, Morteza & Ayanso, Anteneh & Davoudi, Heidar & Kargar, Mehdi & Mengesha, Nigussie, 2021. "Leveraging non-respondent data in customer satisfaction modeling," Journal of Business Research, Elsevier, vol. 135(C), pages 112-126.
    7. Mitrović, Sandra & Baesens, Bart & Lemahieu, Wilfried & De Weerdt, Jochen, 2018. "On the operational efficiency of different feature types for telco Churn prediction," European Journal of Operational Research, Elsevier, vol. 267(3), pages 1141-1155.

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