QUESTION 1

Is Wall’s belief about the dependence of churn rates on customer age supported by the data?

The histogram clearly shows that churn rate of people in

the age group 10-14 are higher than others
QUESTION 1

Is Wall’s belief about the dependence of churn rates on customer age supported by the data?
Contd..

The jitter plot shows that :-

1. The number of customers of the age group 0 –
10 is very high when compare to those of
higher age groups.
2. It is also seen that the majority of churn is seen
among the people of age group 6 - 14
 QUESTION 1

Is Wall’s belief about the dependence of churn rates on customer age supported by the data?
Contd..

Age.Group
<6 6-14 >14 This bar chart shows that customers between
10 0

the age group 6 and 14 discontinue more than

any other age group
80

From the initial graphs we can conclude that

60

Wall’s belief is on the right track

P erce n t

40
20
0

No Yes

Churn..1...Yes..0...No.
QUESTION 2.A

Run a single regression model that best predicts the probability that a customer leaves.
a. What is the predicted probability that Customer 672 will leave between December 2011 and February
2012? Is that high or low? Did that customer actually leave?

The probability that the customer will leave between Dec2011 and
Feb2012 is 3.83%. It is Low.
From the dataset, it can be seen that the customer did not actually
leave.
QUESTION 2.B

Run a single regression model that best predicts the probability that a customer leaves.
B. What about Customers 354 and 5,203?

The probability that the customer 354 will leave between Dec2011
and Feb2012 is 4.85%. It is Low.
The customer did not actually leave.

The probability that the customer 5203 will leave between

Dec2011 and Feb2012 is 4.20%. It is Low.
The customer did not actually leave.
QUESTION 3.
How sensible is the approach with a single model? Can you suggest a better approach?
a) Provide updated estimates of probabilities that Customers 672, 354, and 5,203 will leave.
b) What factors contribute the most to the predicted probabilities that these customers will leave?

The probability that the customer 672 will leave

between Dec 2011 and Feb 2012 is 3.45% according to
the model V3. It is Low.
And the dataset shows that customer did not actually
leave.
The older model gave a probability of 3.83%. Hence
this new model is not better.
QUESTION 3.
How sensible is the approach with a single model? Can you suggest a better approach?
a) Provide updated estimates of probabilities that Customers 672, 354, and 5,203 will leave.
b) What factors contribute the most to the predicted probabilities that these customers will leave?

The probability that the customer 354 will

leave between Dec2011 and Feb2012 is
8.06% according to the model V2. It is Low.
The customer did not actually leave.
The older model gave a probability of 4.85%.
Hence this new model is not better.
QUESTION 3.
How sensible is the approach with a single model? Can you suggest a better approach?
a) Provide updated estimates of probabilities that Customers 672, 354, and 5,203 will leave.
b) What factors contribute the most to the predicted probabilities that these customers will leave?

The probability that the customer 5302 will

leave between Dec2011 and Feb2012 is 0.72%
according to the model V1. It is very Low.
The customer did not actually leave.
The older model gave a probability of 4.20%.
Hence this new model is much better.
QUESTION 4.
Answer Wall’s “ultimate question”: provide the list of 100 customers with highest churn probabilities
and the top three drivers of churn for each customers.

The Excel sheet contains the top 100 customers who are most
likely to leave.
Microsoft Excel
The Key Drivers for :- Worksheet
1. For Cluster 1(customer age <6)
a) CHI.Score.0.1
b) Days.Since.Last.Login.0.1
c) CHI.Score.Month.0
2. For Cluster 2(customer age >=6 and <14)
a) CHI.Score.Month.0
b) Customer.Age..in.months
c) Days.Since.Last.Login.0.1
3. For Cluster 3(customer age >=14)
a) CHI.Score.Month.0
b) Customer.Age..in.months
c) Views.0.1