Measuring the Success of Retention Management Models Built on Churn Probability, Retention Probability, and Expected Yearly Revenues

In this paper, we claim that optimal retention management models should consider not only churn probability but also retention probability and expected revenues from target customers. To validate our claim, we develop and compare five retention management models based on churn probability, retention probability, expected revenues, and combination of these models along with different evaluation metrics. Our experimental results show that the retention management model with the highest accuracy in predicting possible churners is not necessarily optimal because it does not consider the probability of accepting retention promotions. In contrast, the retention management model based on both churn and retention probability is the best in terms of predicting customers who are most likely to positively respond to retention promotions. Ultimately, the model based on expected yearly revenue of customers accrues the highest revenues across most target points, making it the best model out of five retention management models

Customer Retention: Reducing Online Casino Player Churn Through the Application of Predictive Modeling

With the potential expansion of legalized online gaming in the United States as well as in the global market, customer retention is critical to the continued growth and success of an online casino. While customer churn prediction can be an essential part of customer retention efforts, it has received very little attention in the gaming literature. Using historical online gaming data, this study examines whether player churn (attrition) can be predicted through an application of a decision tree data mining algorithm called Exhaustive CHAID (E-CHAID). The results of this empirical study suggest that the predictive model based on the E-CHAID method can be a valuable tool for identifying potential churners and understanding their churn behavior. Additionally, this study shows how the classification rules and propensity scores extracted from a decision tree churn model can be used to identify players at risk of churn. The patron play and visitation parameters that are closely associated with churn are also discussed. This study contributes to the gaming literature by focusing on online players’ churn prediction through a data-driven approach. Finally, it discusses proactive approaches for churn prevention

The value of a user for codacy

This research was developed in straight collaboration with the Portuguese startup Codacy with the purpose of valuing the different types of users by defining metrics for each segment created. The users were segmented according to their subscription plan — Cloud and Enterprise, Monthly Recurring Revenue (MRR) - Small, Medium and Big Accounts and subscription length - Monthly and Yearly. The main conclusion is that medium and big accounts are the main growth drivers. Furthermore, those metrics also provide powerful insights by enabling Codacy to be more data-driven across departments especially approaching Product Market Fit

Modelling partial customer churn in the Portuguese fixed telecommunications industry by using survival models

Considering that profits from customer relationships are the lifeblood of firms (Grant and Schlesinger, 1995), an improvement on the customer management is essential to ensure the competitivity and success of firms. For the last decade, Portuguese customers of fixed telecommunications industry have easily switched the service provider, which has been very damaging for the business performance and, therefore, for the economy. The main objective of this study is to analyse the partial churn of residential customers in the fixed-telecommunications industry (fixed-telephone and ADSL), by using survival models. Additionally, we intend to test the assumption of constant customer retention rate over time and across customers. Lastly, the effect of satisfaction on partial customer churn is analysed. The models are developed by using large-scale data from an internal database of a Portuguese fixed telecommunications company. The models are estimated with a large number of covariates, which includes customer’s basic information, demographics, churn flag, customer historical information about usage, billing, subscription, credit, and other. Our results show that the variables that influence the partial customer churn are the service usage, mean overall revenues, current debts, the number of overdue bills, payment method, equipment renting, the existence of flat plans and the province of the customer. Portability also affects the probability of churn in fixed-telephone contracts. The results also suggest that the customer retention rate is neither constant over time nor across customers, for both types of contracts. Lastly, it seems that satisfaction does not influence the cancellation of both types of contracts.Considerando que os lucros gerados pelos clientes são vitais para as empresas (Grant e Schlesinger, 1995), uma melhoria na gestão do cliente é fundamental para assegurar a competitividade e o sucesso das empresas. Na última década, os clientes portugueses das empresas de telecomunicações fixas têm mudado de operador com demasiada facilidade, o que tem prejudicado o desempenho das empresas e, consequentemente, a economia. O principal objectivo deste estudo é analisar o cancelamento de contratos de telefone fixo e ADSL por clientes residenciais, através do uso de modelos de sobrevivência. Para além disso, pretende-se testar o pressuposto de que a taxa de retenção de clientes é constante ao longo do tempo e entre clientes. Por último, pretende-se analisar o efeito da satisfação do cliente no cancelamento destes tipos de contratos. Os modelos são construídos com base numa base de dados de larga escala fornecida por uma empresa portuguesa deste sector. Os modelos são estimados com base num vasto número de variáveis, incluindo informação básica sobre o cliente, dados demográficos, indicação sobre o cancelamento do contrato, dados históricos sobre o uso dos serviços, facturação, contracto, crédito, etc.. Os resultados mostram que as variáveis que influenciam o cancelamento de ambos os tipos de contratos são o uso do serviço, a facturação média, o valor em dívida, o número de facturas em dívida, o método de pagamento, o método de pagamento do equipamento, a existência de tarifas planas e o distrito do cliente. A portabilidade de número parece influenciar o cancelamento de contratos de telefone fixo. Os resultados também mostram que a taxa de retenção de clientes não é constante ao longo do tempo nem entre clientes em ambos os tipos de contratos. Por último, parece que a satisfação não influencia o cancelamento de ambos os tipos de contratos

A model to Predict Churn

This Master Thesis has been performed at Svenska Spel with the aim to detect playing customers probability to churn, i.e. quit their gambling. The first part of the Thesis consists of some previously work done within the field, some facts about Svenska Spel and explanations of used software. The next part describes how the work has been done and the third part give the reader the theory behind the prediction model. The model used for prediction churn is Logistic Regression with related statistical test to investigate and verify the model. Finally, a prediction model and verification results are presented