Retention Futility: Targeting High-Risk Customers Might be Ineffective

2018 ◽  
Vol 55 (1) ◽  
pp. 80-98 ◽  
Author(s):  
Eva Ascarza
Keyword(s):  
Randomized Trials ◽  
Field Experiments ◽  
Prediction Models ◽  
Machine Learning Techniques ◽  
Churn Prediction ◽  
Average Effect ◽  
Customer Churn ◽  
Learning Techniques ◽  
Vast Literature ◽  
The Right

Companies in a variety of sectors are increasingly managing customer churn proactively, generally by detecting customers at the highest risk of churning and targeting retention efforts towards them. While there is a vast literature on developing churn prediction models that identify customers at the highest risk of churning, no research has investigated whether it is indeed optimal to target those individuals. Combining two field experiments with machine learning techniques, the author demonstrates that customers identified as having the highest risk of churning are not necessarily the best targets for proactive churn programs. This finding is not only contrary to common wisdom but also suggests that retention programs are sometimes futile not because firms offer the wrong incentives but because they do not apply the right targeting rules. Accordingly, firms should focus their modeling efforts on identifying the observed heterogeneity in response to the intervention and to target customers on the basis of their sensitivity to the intervention, regardless of their risk of churning. This approach is empirically demonstrated to be significantly more effective than the standard practice of targeting customers with the highest risk of churning. More broadly, the author encourages firms and researchers using randomized trials (or A/B tests) to look beyond the average effect of interventions and leverage the observed heterogeneity in customers' response to select customer targets.

scholarly journals A Critical Examination of Different Models for Customer Churn Prediction using Data Mining

2019 ◽  
Vol 8 (6S3) ◽  
pp. 850-854
Keyword(s):  
Machine Learning ◽  
Data Mining ◽  
Prediction Models ◽  
Machine Learning Techniques ◽  
Critical Examination ◽  
Churn Prediction ◽  
Customer Churn ◽  
Learning Techniques ◽  
Customer Churn Prediction ◽  
Using Data

Due to competition between online retailers, the need for providing improved customer service has grown rapidly. In addition to reduction in sales due to loss of customers, more investments are needed to be done to attract new customers. Companies now are working continuously to improve their perceived quality by way of giving timely and quality service to their customers. Customer churn has become one of the primary challenges that many firms are facing nowadays. Several churn prediction models and techniques are proposed previously in literature to predict customer churn in areas such as finance, telecom, banking etc. Researchers are also working on customer churn prediction in e-commerce using data mining and machine learning techniques. In this paper, a comprehensive review of various models to predict customer churn in e-commerce data mining and machine learning techniques has been presented. A critical review of recent research papers in the field of customer churn prediction in e-commerce using data mining has been done. Thereafter, important inferences and research gaps after studying the literature are presented. Finally, the research significance and concluding remarks are described in the end.

scholarly journals Elderly Healthcare System for Chronic Ailments using Machine Learning Techniques – a Review

2021 ◽  
pp. 3138-3151
Author(s):  
R. L. Priya ◽  
S. Vinila Jinny
Keyword(s):  
Machine Learning ◽  
Prediction Models ◽  
Early Stage ◽  
Review Literature ◽  
Machine Learning Techniques ◽  
Emergency Situations ◽  
Learning Techniques ◽  
Generic Architecture ◽  
Prediction Systems ◽  
The Right

     World statistics declare that aging has direct correlations with more and more health problems with comorbid conditions. As healthcare communities evolve with a massive amount of data at a faster pace, it is essential to predict, assist, and prevent diseases at the right time, especially for elders. Similarly, many researchers have discussed that elders suffer extensively due to chronic health conditions.  This work was performed to review literature studies on prediction systems for various chronic illnesses of elderly people. Most of the reviewed papers proposed machine learning prediction models combined with, or without, other related intelligence techniques for chronic disease detection of elderly patients at an early stage to avoid emergency situations. This method provides a promising approach in the analysis of either structured or unstructured datasets to produce very substantial pattern discoveries. By defining the generic architecture for the prediction model, we reviewed various papers involved in similar fields, based on suggested methodologies and their associated outcomes. The study discussed the pros and cons of different prediction models using traditional and modern machine learning techniques.

A Survey of Evolution in Predictive Models and Impacting Factors in Customer Churn

2017 ◽  
Vol 09 (03) ◽  
pp. 1750007 ◽  
Author(s):  
Mehreen Ahmed ◽  
Hammad Afzal ◽  
Awais Majeed ◽  
Behram Khan
Keyword(s):  
Customer Service ◽  
Probabilistic Models ◽  
Prediction Models ◽  
Machine Learning Techniques ◽  
Support Vector ◽  
Churn Prediction ◽  
Customer Churn ◽  
Service Response Time ◽  
Telecom Industry ◽  
Simple Features

The information-based prediction models using machine learning techniques have gained massive popularity during the last few decades. Such models have been applied in a number of domains such as medical diagnosis, crime prediction, movies rating, etc. Similar is the trend in telecom industry where prediction models have been applied to predict the dissatisfied customers who are likely to change the service provider. Due to immense financial cost of customer churn in telecom, the companies from all over the world have analyzed various factors (such as call cost, call quality, customer service response time, etc.) using several learners such as decision trees, support vector machines, neural networks, probabilistic models such as Bayes, etc. This paper presents a detailed survey of models from 2000 to 2015 describing the datasets used in churn prediction, impacting features in those datasets and classifiers that are used to implement prediction model. A total of 48 studies related to churn prediction in telecom industry are discussed using 23 datasets (3 public and 20 private). Our survey aims to highlight the evolution of techniques from simple features/learners to more complex learners and feature engineering or sampling techniques. We also give an overview of the current challenges in churn prediction and suggest solutions to resolve them. This paper will allow researchers such as data analysts in general and telecom operators in particular to choose best suited techniques and features to prepare their churn prediction models.

A Review of Statistical and Machine Learning Techniques for Microvascular Complications in Type 2 Diabetes

2020 ◽  
Vol 16 ◽  
Author(s):  
Nitigya Sambyal ◽  
Poonam Saini ◽  
Rupali Syal
Keyword(s):  
Machine Learning ◽  
Prediction Models ◽  
Clinical Medicine ◽  
Microvascular Complications ◽  
Descriptive Analysis ◽  
Machine Learning Techniques ◽  
World Health ◽  
Public Health Issue ◽  
Learning Techniques ◽  
Health Organization

Background and Introduction: Diabetes mellitus is a metabolic disorder that has emerged as a serious public health issue worldwide. According to the World Health Organization (WHO), without interventions, the number of diabetic incidences is expected to be at least 629 million by 2045. Uncontrolled diabetes gradually leads to progressive damage to eyes, heart, kidneys, blood vessels and nerves. Method: The paper presents a critical review of existing statistical and Artificial Intelligence (AI) based machine learning techniques with respect to DM complications namely retinopathy, neuropathy and nephropathy. The statistical and machine learning analytic techniques are used to structure the subsequent content review. Result: It has been inferred that statistical analysis can help only in inferential and descriptive analysis whereas, AI based machine learning models can even provide actionable prediction models for faster and accurate diagnose of complications associated with DM. Conclusion: The integration of AI based analytics techniques like machine learning and deep learning in clinical medicine will result in improved disease management through faster disease detection and cost reduction for disease treatment.

Sign in / Sign up

Export Citation Format

Share Document