Mining churning behaviors and developing retention strategies based on a partial least squares (PLS) model

Mining churning behaviors and developing retention strategies based on a partial least squares (PLS) model

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Article ID: iaor201110914
Volume: 52
Issue: 1
Start Page Number: 207
End Page Number: 216
Publication Date: Dec 2011
Journal: Decision Support Systems
Authors: , , , ,
Keywords: communications, economics, simulation, decision
Abstract:

In a very competitive mobile telecommunication business environment, marketing managers need a business intelligence model that allows them to maintain an optimal (at least a near optimal) level of churners very effectively and efficiently while minimizing the costs throughout their marketing programs. As a first step toward optimal churn management program for marketing managers, this paper focuses on building an accurate and concise predictive model for the purpose of churn prediction utilizing a partial least squares (PLS)‐based methodology on highly correlated data sets among variables. A preliminary experiment demonstrates that the presented model provides more accurate performance than traditional prediction models and identifies key variables to better understand churning behaviors. Further, a set of simple churn marketing programs–device management, overage management, and complaint management strategies–is presented and discussed.

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