Customer churn time prediction in mobile telecommunication industry using ordinal regression

Abstract

Customer churn in considered to be a core issue in telecommunication customer relationship management (CRM). Accurate prediction of churn time or customer tenure is important for developing appropriate retention strategies. In this paper, we discuss a method based on ordinal regression to predict churn time or tenure of mobile telecommunication customers. Customer tenure is treated as an ordinal outcome variable and ordinal regression is used for tenure modeling. We compare ordinal regression with the state-of-the-art methods for tenure prediction - survival analysis. We notice from our results that ordinal regression could be an alternative technique for survival analysis for churn time prediction of mobile customers. To the best knowledge of authors, the use of ordinal regression as a potential technique for modeling customer tenure has been attempted for the first time. © 2008 Springer-Verlag Berlin Heidelberg.