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Incorporating sequential information into traditional classification models by using an element/position- sensitive SAM

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The inability to capture sequential patterns is a typical drawback of predictive classification methods. This caveat might be overcome by modeling sequential independent variables by sequence-analysis methods. Combining classification methods with sequenceanalysis methods enables classification models to incorporate non-time varying as well as sequential independent variables. In this paper, we precede a classification model by an element/position-sensitive Sequence-Alignment Method (SAM) followed by the asymmetric, disjoint Taylor-Butina clustering algorithm with the aim to distinguish clusters with respect to the sequential dimension. We illustrate this procedure on a customer-attrition model as a decisionsupport system for customer retention of an International Financial-Services Provider (IFSP). The binary customer-churn classification model following the new approach significantly outperforms an attrition model which incorporates the sequential information directly into the classification method.

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Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 05/292.

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Length: 36 pages
Date of creation: Feb 2005
Handle: RePEc:rug:rugwps:05/292
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  1. Toth, Paolo & Vigo, Daniele, 1999. "A heuristic algorithm for the symmetric and asymmetric vehicle routing problems with backhauls," European Journal of Operational Research, Elsevier, vol. 113(3), pages 528-543, March.
  2. Baesens, Bart & Verstraeten, Geert & Van den Poel, Dirk & Egmont-Petersen, Michael & Van Kenhove, Patrick & Vanthienen, Jan, 2004. "Bayesian network classifiers for identifying the slope of the customer lifecycle of long-life customers," European Journal of Operational Research, Elsevier, vol. 156(2), pages 508-523, July.
  3. Glen L. Urban & Philip L. Johnson & John R. Hauser, 1984. "Testing Competitive Market Structures," Marketing Science, INFORMS, vol. 3(2), pages 83-112.
  4. Van den Poel, Dirk & Lariviere, Bart, 2004. "Customer attrition analysis for financial services using proportional hazard models," European Journal of Operational Research, Elsevier, vol. 157(1), pages 196-217, August.
  5. W. Buckinx & E. Moons & D. Van Den Poel & G. Wets, 2003. "Customer-Adapted Coupon Targeting Using Feature Selection," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/201, Ghent University, Faculty of Economics and Business Administration.
  6. W C Wilson, 1998. "Activity Pattern Analysis by Means of Sequence-Alignment Methods," Environment and Planning A, , vol. 30(6), pages 1017-1038, June.
  7. W C Wilson, 1998. "Activity pattern analysis by means of sequence-alignment methods," Environment and Planning A, Pion Ltd, London, vol. 30(6), pages 1017-1038, June.
  8. Prinzie, Anita & Van den Poel, Dirk, 2006. "Investigating purchasing-sequence patterns for financial services using Markov, MTD and MTDg models," European Journal of Operational Research, Elsevier, vol. 170(3), pages 710-734, May.
  9. B. Larivière & D. Van Den Poel, 2004. "Investigating the role of product features in preventing customer churn, by using survival analysis and choice modeling: The case of financial services," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/223, Ghent University, Faculty of Economics and Business Administration.
  10. Raj Sethuraman & V. Srinivasan & Doyle Kim, 1999. "Asymmetric and Neighborhood Cross-Price Effects: Some Empirical Generalizations," Marketing Science, INFORMS, vol. 18(1), pages 23-41.
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This item is featured on the following reading lists or Wikipedia pages:

  1. Alineamiento de secuencias in Wikipedia Spanish ne '')
  2. 聚类分析 in Wikipedia Chinese ne '')
  3. Aliñamento de secuencias in Wikipedia Galician ne '')
  4. User:Webridge/我的沙盘/2 in Wikipedia Chinese ne '')
  5. Dizi hizalaması in Wikipedia Turkish ne '')
  6. Customer attrition in Wikipedia English ne '')
  7. Sequence alignment in Wikipedia English ne '')

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