Article ID: | iaor201110914 |
Volume: | 52 |
Issue: | 1 |
Start Page Number: | 207 |
End Page Number: | 216 |
Publication Date: | Dec 2011 |
Journal: | Decision Support Systems |
Authors: | Cho Hyunbo, Lee Hyeseon, Lee Yeonhee, Im Kwanyoung, Kim Yong Seog |
Keywords: | communications, economics, simulation, decision |
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.