Customer Churn Prediction

Objectives Of Customer Churn

Prediction
 Early Identification of Churn Risk:
Predict which customers are at a high risk of churning in the near future. This allows the
company to take proactive measures to retain them.
 Understanding Churn Drivers:
Analyze the factors and behaviors that contribute most significantly to customer churn. This
insight can guide the development of targeted interventions.
 Maximizing Customer Lifetime Value (CLV):
Focus on retaining high-value customers by allocating resources where they are most likely to
yield the highest return on investment.
 Resource Allocation and Budgeting:
Allocate marketing, customer service, and other resources more efficiently by targeting efforts
towards customers with the highest churn risk.
Included data
It involves gathering relevant information about customers and their interactions with the business

 Customer Information:
i. Demographics: Age, gender, location, income level, etc.
ii. Contact Information: Email addresses, phone numbers, mailing addresses.
iii. Account Details: Customer IDs, subscription types, account creation dates.

 Usage Data:
i. Product Usage: Frequency of product usage, feature adoption, session duration, etc
ii. Purchase History: Transaction dates, amounts, and frequency of purchases.
iii. Service Interactions: Customer service calls, chat logs, support tickets, etc.

 Behavioral Data:
i. Website Interactions: Click-through rates, pages visited, time spent on site.
ii. App Interactions: App opens, in-app actions, user journeys.
iii. Social Media Activity: Engagement metrics, comments, shares.
 Visualization Strategy
It helps in gaining insights from the data, understanding patterns, and communicating findings to stakeholders
effectively.

 Exploratory Data Analysis (EDA):

i. Histograms and Distributions: Use histograms to visualize the distribution of continuous variables like age, transaction
amounts, etc. This helps in understanding the range and spread of data.
ii. Box Plots: Box plots can provide insights into the distribution of variables and help identify outliers.

 Churn Analysis:
i. Churn Rate Over Time: Plot the churn rate over different time periods to identify trends. This could be monthly,
quarterly, or yearly, depending on the business context.
ii. Cohort Analysis: Visualize how different cohorts (groups of customers who signed up in the same period) behave over
time. This can reveal patterns in retention.

 Feature Importance:
i. Bar Charts or Horizontal Bar Charts: Visualize the importance of different features in predicting churn. This
can be based on metrics like feature importance scores from models or statistical tests
Predictive Modeling

 Model Selection:
Choose appropriate algorithms for the task. Common models for customer churn prediction include logistic regression,
decision trees, random forests, support vector machines, and neural networks.

 Model Training:
Train the selected model using the training data. The model learns to make predictions based on the relationships
between the features and the churn outcome.

 Model Evaluation:
Use metrics such as accuracy, precision, recall, F1-score, and area under the ROC curve (AUC-ROC) to assess the
model's performance on the testing data.

 Model Deployment:
Integrate the trained model into the company's existing systems or platforms where it can be used to make real-time
predictions.
Flowchart
Applications and Algorithms used

1. Allows businesses to leverage reliable  Logistic Regression

information about their current
customers
 Support Vector Machines
2. Giving them information to build
effective customer retention and
marketing strategies.  Bayes Algorithm
3. Detecting which customers are likely to
leave a service or to cancel a
subscription to a service.  Linear Discriminant Analysis
4. To assess in advance whether a specific
customer is likely to leave the company  Decision Trees
My Role

Project Manager

 Responsibilities:
• Defines project scope, objectives, and deliverables.
• Creates a project plan, including timelines, milestones, and resource allocation.
• Manages and coordinates the project team.
• Monitors progress, identifies and mitigates risks, and ensures adherence to
timelines.
• Communicates with stakeholders, providing updates and managing expectations.