A Hybrid Data Mining Method for Customer Churn Prediction

Abstract

The expenses for attracting new customers are much higher compared to the ones needed to maintain old customers due to the increasing competition and business saturation. So customer retention is one of the leading factors in companies’ marketing. Customer retention requires a churn management, and an effective management requires an exact and effective model for churn prediction. A variety of techniques and methodologies have been used for churn prediction, such as logistic regression, neural networks, genetic algorithm, decision tree etc.. In this article, a hybrid method is presented that predicts customers churn more accurately, using data fusion and feature extraction techniques. After data preparation and feature selection, two algorithms, LOLIMOT and C5.0, were trained with different size of features and performed on test data. Then the outputs of the individual classifiers were combined with weighted voting. The results of applying this method on real data of a telecommunication company proved the effectiveness of the method.