Application of Machine Learning in the Telecommunications Industry: Partial Churn Prediction by using a Hybrid Feature Selection Approach
Subject Areas : Machine learningFatemeh Mozaffari 1 , Iman Raeesi Vanani 2 , Payam Mahmoudian 3 , Babak Sohrabi 4
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Keywords: Partial Churn, Churn Prediction, Machine Learning, Feature Selection, Telecommunications Industry, The Wisdom of the Crowd.,
Abstract :
The telecommunications industry is one of the most competitive industries in the world. Because of the high cost of customer acquisition and the adverse effects of customer churn on the company's performance, customer retention becomes an inseparable part of strategic decision-making and one of the main objectives of customer relationship management. Although customer churn prediction models are widely studied in various domains, several challenges remain in designing and implementing an effective model. This paper addresses the customer churn prediction problem with a practical approach. The experimental analysis was conducted on the customers' data gathered from available sources at a telecom company in Iran. First, partial churn was defined in a new way that exploits the status of customers based on criteria that can be measured easily in the telecommunications industry. This definition is also based on data mining techniques that can find the degree of similarity between assorted customers with active ones or churners. Moreover, a hybrid feature selection approach was proposed in which various feature selection methods, along with the crowd's wisdom, were applied. It was found that the wisdom of the crowd can be used as a useful feature selection method. Finally, a predictive model was developed using advanced machine learning algorithms such as bagging, boosting, stacking, and deep learning. The partial customer churn was predicted with more than 88% accuracy by the Gradient Boosting Machine algorithm by using 5-fold cross-validation. Comparative results indicate that the proposed model performs efficiently compared to the ones applied in the previous studies.
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