Skip to main content

Predicting Customer Churn: Customer Behavior Forecasting for Subscription-Based Organizations

  • Conference paper
  • First Online:

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 299))

Abstract

Churn is the opposite of growth. Losing customers has serious impact on company’s overall performance. More specifically, means lost in sales and revenue, but also negative sentiment and potential negative impact to organization’s image for the competition. The increased importance of managing churn in subscription-based organizations, lead various efforts by subscription-based organizations to face the problem. Both, academic researchers and business practitioners, focusing on techniques around customer behavior forecasting. During the last years, various technologies have been used to forecast customer behavior in subscription-based organizations. To investigate further this area this paper aims to report on the research issues around customer churn and investigate previous customer churn prediction approaches in order to propose a new conceptual model for customer behavior forecasting.

This is a preview of subscription content, log in via an institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

References

  1. Huang, B., Tahar Kechadi, M., Buckley, B.: Customer churn prediction in telecommunications. Expert Syst. Appl. 39(1), 1414–1425 (2012)

    Article  Google Scholar 

  2. Yan, L., Wolniewicz, R.H., Dodier, R.: Predicting customer behavior in telecommunications. IEEE Intell. Syst. 19(2), 50–58 (2004)

    Article  Google Scholar 

  3. Hung, S.-Y., Yen, D.C., Wang, H.-Y.: Applying data mining to telecom churn management. Expert Syst. Appl. 31(3), 515–524 (2006)

    Article  Google Scholar 

  4. Amin, A., et al.: Comparing oversampling techniques to handle the class imbalance problem: a customer churn prediction case study. IEEE Access 4, 7940–7957 (2016)

    Article  Google Scholar 

  5. Hadden, J., et al.: Computer assisted customer churn management: state-of-the-art and future trends. Comput. Oper. Res. 34(10), 2902–2917 (2007)

    Article  MATH  Google Scholar 

  6. Noh, H., Kwak, M., Han, I.: Improving the prediction performance of customer behavior through multiple imputation. Intell. Data Anal. 8(6), 563–577 (2004)

    Google Scholar 

  7. Tsai, C.-F., Lu, Y.-H.: Customer churn prediction by hybrid neural networks. Expert Syst. Appl. 36(10), 12547–12553 (2009)

    Article  Google Scholar 

  8. Breiman, L.: Random forests. Mach. learn. 451, 5–32 (2001)

    Article  MATH  Google Scholar 

  9. Huang, K., et al.: Sparse learning for support vector classification. Pattern Recognit. Lett. 31(13), 1944–1951 (2010)

    Article  Google Scholar 

  10. Farquad, M.A.H., Ravi, V., Bapi Raju, S.: Churn prediction using comprehensible support vector machine: an analytical CRM application. Appl. Soft Comput. 19, 31–40 (2014)

    Article  Google Scholar 

  11. Amin, A., Shehzad, S., Khan, C., Ali, I., Anwar, S.: Churn prediction in telecommunication industry using rough set approach. In: Camacho, D., Kim, S.-W., Trawiński, B. (eds.) New Trends in Computational Collective Intelligence. SCI, vol. 572, pp. 83–95. Springer, Cham (2015). doi:10.1007/978-3-319-10774-5_8

    Google Scholar 

  12. Techtarget.com: Churn rate, February 2017. http://searchcrm.techtarget.com/definition/churn-rate

  13. Kumar, V., Reinartz, W.: Creating enduring customer value. J. Mark. 80(6), 36–68 (2016)

    Article  Google Scholar 

  14. Melgarejo Galvan, A.R., Clavo Navarro, K.R.: Big data architecture for predicting churn risk in mobile phone companies. In: Lossio-Ventura, J.A., Alatrista-Salas, H. (eds.) SIMBig 2015-2016. CCIS, vol. 656, pp. 120–132. Springer, Cham (2017). doi:10.1007/978-3-319-55209-5_10

    Chapter  Google Scholar 

  15. Mwegerano, A.M., et al.: Managing customer issues through a support channel network (2014)

    Google Scholar 

  16. Keaveney, S.M.: Customer switching behavior in service industries an exploratory study. J. Mark. 59, 71–82 (1995)

    Article  Google Scholar 

  17. Stevenson, W.J., Hojati, M.: Operations Management, vol. 8. McGraw-Hill/Irwin, Boston (2007)

    Google Scholar 

  18. Sain, S., Wilde, S.: Customer Knowledge Management. Springer International Publishing, Cham (2014)

    Book  Google Scholar 

  19. McColl-Kennedy, J.R.: Customer satisfaction, assessment, intentions and outcome behaviors of dyadic service encounters: a conceyfual model. In: Ford, J.B., Honeycutt Jr., E.D. (eds.) Proceedings of the 1998 Academy of Marketing Science (AMS) Annual Conference. DMSPAMS, pp. 48–54. Springer, Cham (2015). doi:10.1007/978-3-319-13084-2_10

    Google Scholar 

  20. Lazarov, V., Capota. M.: Churn prediction. Bus. Anal. Course. TUM Comput. Sci. (2007)

    Google Scholar 

  21. Bloemer, J., De Ruyter, K., Peeters, P.: Investigating drivers of bank loyalty: the complex relationship between image, service quality and satisfaction. Int. J. Bank Mark. 16(7), 276–286 (1998)

    Article  Google Scholar 

  22. McDonald, L.M., Rundle-Thiele, S.: Corporate social responsibility and bank customer satisfaction: a research agenda. Int. J. Bank. Mark. 26, 170–182 (2008)

    Article  Google Scholar 

  23. Coussement, K., De Bock, K.W.: Customer churn prediction in the online gambling industry the beneficial effect of ensemble learning. J. Bus. Res. 66(9), 1629–1636 (2013)

    Article  Google Scholar 

  24. Suznjevic, M., Stupar, I., Matijasevic, M.: MMORPG player behavior model based on player action categories. In: Proceedings of the 10th Annual Workshop on Network and Systems Support for Games, p. 6. IEEE Press (2011)

    Google Scholar 

  25. Abe, M.: Deriving customer lifetime value from RFM Measures: insights into customer retention and acquisition (2015)

    Google Scholar 

  26. Reichheld, F.F., Schefter, F.: E-loyalty: your secret weapon on the web. Harv. Bus. Rev. 78(4), 105–113 (2000)

    Google Scholar 

  27. Keiningham, T.L., et al.: The value of different customer satisfaction and loyalty metrics in predicting customer retention, recommendation, and share-of-wallet. Manag. Serv. Qual. Int. J. 17(4), 361–384 (2007)

    Article  Google Scholar 

  28. Invesp: https://www.invespcro.com/blog/customer-acquisition-retention

  29. Burez, J., Van den Poel, D.: CRM at a pay-TV company: using analytical models to reduce customer attrition by targeted marketing for subscription services. Expert Syst. Appl. 32(2), 277–288 (2007)

    Article  Google Scholar 

  30. Friedman, J., Hastie, T., Tibshirani, R.: The Elements of Statistical Learning. Springer Series in Statistics, vol. 1. Springer, New York (2001)

    MATH  Google Scholar 

  31. Lawson, C., Montgomery, D.C.: Logistic regression analysis of customer satisfaction data. Qualit. Reliab. Eng. Int. 22(8), 971–984 (2006)

    Article  Google Scholar 

  32. Hadden, J., et al.: Churn prediction: does technology matter. Int. J. Intell. Technol. 1(2), 104–110 (2006)

    Google Scholar 

  33. Au, W.-H., Chan, K.C.C., Yao, X.: A novel evolutionary data mining algorithm with applications to churn prediction. IEEE Trans. Evol. Comput. 7(6), 532–545 (2003)

    Article  Google Scholar 

  34. Zhao, Y., Li, B., Li, X., Liu, W., Ren, S.: Customer churn prediction using improved one-class support vector machine. In: Li, X., Wang, S., Dong, Z.Y. (eds.) ADMA 2005. LNCS, vol. 3584, pp. 300–306. Springer, Heidelberg (2005). doi:10.1007/11527503_36

    Chapter  Google Scholar 

Download references

Acknowledgment

The publication of this paper has been partly supported by the University of Piraeus Research Centre.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Leonidas Katelaris .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2017 Springer International Publishing AG

About this paper

Cite this paper

Katelaris, L., Themistocleous, M. (2017). Predicting Customer Churn: Customer Behavior Forecasting for Subscription-Based Organizations. In: Themistocleous, M., Morabito, V. (eds) Information Systems. EMCIS 2017. Lecture Notes in Business Information Processing, vol 299. Springer, Cham. https://doi.org/10.1007/978-3-319-65930-5_11

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-65930-5_11

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-65929-9

  • Online ISBN: 978-3-319-65930-5

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics