Table 7: Confusion Matrix.
As mentioned in the previous section, we also
wanted to see the results with “Logistic Regression”
applied to both RFM data and mining variables that
were prepared for the selected subscriber set. The
results which got from Logistic Regression model
which was run only with the RFM data has the highest
“Accuracy” value for the probability of aliveness
which can be easily seen from Table 7, the model
performance values for Logistics Regression with
RFM data performed better than Logistics Regression
with other variables. This shows that for prepaid
subscribers simply using the RFM Data will enable
the operators to be able to target the most responsive
subscriber population.
For future work the parameter estimation can be
developed for high volume of transaction especially
like mobile data which has high potential to generate
big data. If this parameter estimation would give
better results, the RFM data will be valuable
predictive model for the prepaid subscribers’
behaviour analysis in mobile sector. Because most of
the time, there is not much definitive data for the
prepaid subscribers.
Moreover, the Pareto/NBD model is base model
for the lifetime calculation of a customer. Therefore
one of the next step could be calculating LTV if the
parameter estimation problem is solved.
REFERENCES
Neslin, S., Blattberg, R. and Kim, B., 2008. Database
Marketing: Analyzing and Managing Customers.
Springer
Fader, P., Bruce H., and Ka, L., 2005b. RFM and CLV:
Using Iso-Value Curves for Customer Base Analysis.
Journal of Marketing Research, 42 (November), 415–
430.
Schmittlein, David C., Donald G. Morrison, and Richard
Colombo, 1987. Counting Your Customers: Who They
Are and What Will They Do Next? Management
Science, 33 (January), 1–24.
Fader, P., Hardie, B., 2005. A Note on Deriving the
Pareto/NBD Model and Related Expressions.
“http://brucehardie.com/notes/009/”
Pfeifer, P., Haskins, M. and Conroy, R., 2005. Customer
Lifetime Value, Customer Profitability, and the
Treatment of Acquisition Spending, Journal of
Managerial Issues, 17 (Spring), 11–25
Dairo, A. and Akinwumi, T. 2014. Dormancy Prediction
Model in a Prepaid Predominant Mobile Market: A
Customer Value Management Approach. International
Journal of Data Mining & Knowledge Management
Process (IJDKP) Vol.4, No.1.
Owczarczuk, M. 2010. Churn models for prepaid
customers in the cellular telecommunication industry
using large data marts. Expert Systems with
Applications, Volume 37, Issue 6, Pages 4710–4712,
Elsevier.
Khan, M., Manoj, J., Singh, A., Blumenstock, J., 2015.
Behavioral Modeling for Churn Prediction: Early
Indicators and Accurate Predictors of Custom
Defection and Loyalty. 2015 IEEE International
Congress on Big Data, pp. 677-680.
Kirui, C., Hong, L., Cheruiyot, W. and Kirui, H., 2013.
Predicting Customer Churn in Mobile Telephony
Industry Using Probabilistic Classifiers in Data
Mining. IJCSI International Journal of Computer
Science Issues, Vol. 10, Issue 2, No 1.
Lu, J., 2002. Predicting Customer Churn in the
Telecommunications Industry - An Application of
Survival Analysis Modeling Using SAS. SUGI 27, Data
Mining Techniques, Paper 114-27.
Ahna, J., Hana, S. and Leeb, Y., 2006. Customer churn
analysis: Churn determinants and mediation effects of
partial defection in the Korean mobile
telecommunications service industry.
Telecommunications Policy, Volume 30, Issues 10–11,
Pages 552–568, Elsevier.
Dahiya, K. and Bhatia, S. 2015. Customer Churn Analysis
in Telecom Industry. 4th International Conference on
Reliability, Infocom Technologies and Optimization
(ICRITO) (Trends and Future Directions), 1 - 6, IEEE.
Birant, D., 2011. Data Mining Using RFM Analysis.
Knowledge-Oriented Applications in Data Mining,
Prof.Kimito Funatsu (Ed.).
Neslin, S., Blattberg, R. and Kim, B., 2008. RFM Analysis.
Database Marketing Volume 18 of the series
Model Cut-Off TP TN FP FN Total Accuracy TP Rate FP Rate Precision
0.5 5439 725 223 93 6480 0.95 0.98 0.24 0.96
0.6 5379 735 213 153 6480 0.94 0.97 0.22 0.96
0.7 5284 756 192 248 6480 0.93 0.96 0.20 0.96
0.8 5150 782 166 382 6480 0.92 0.93 0.18 0.97
0.9 4782 826 122 750 6480 0.87 0.86 0.13 0.98
0.5 5531 0 948 1 6480 0.85 1.00 1.00 0.85
0.6 5531 0 948 1 6480 0.85 1.00 1.00 0.85
0.7 5531 0 948 1 6480 0.85 1.00 1.00 0.85
0.8 5530 0 948 2 6480 0.85 1.00 1.00 0.85
0.9 5525 6 942 7 6480 0.85 1.00 0.99 0.85
Log Reg with RFM
Log Reg with Variable