Abstract
Telecommunication sector is a saturated market, and each client’s action affects the company profit. The most valuable asset of the telecommunication company represents its clients’ database. The Telecom industry pays special attention to the migrant clients because from an economic perspective, the cost invested by the company in the acquisition of a new customer is higher than the cost of keeping an existing client. This paper aims to determine the most important factors that influence the decision of a client to migrate from a telecom provider to another through a graphical method. We apply the churn prediction model on a dataset from Romania that has not yet been studied before. We choose to use the Balanced Random Forest technique to build the churn prediction model and the AUC coefficient to evaluate it. Permutation importance makes a classification of the most important features in the model and measures their impact through a metric called the importance score. The result proves that the most significant three factors in the churn phenomenon (client migration) are the number of months since the last change in the account, the number of minutes off the network and the invoice cost, a significant difference in score, the first the indicator being ten times more important than the next one. Therefore, we can state that we can resolve the main action by resolving the churn problem on the current dataset solved by monitoring and evaluating these variables.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Achawanantakun, R., Chen, J., Sun, Y., & Zhang, Y. (2015). LncRNA-ID: Long non-coding RNA IDentification using balanced random forests. Bioinformatics, btv480.
Archer, K., & Kimes, R. (2008). Empirical characterization of random forest variable importance measures. Computational Statistics & Data Analysis, 52(4), 2249–2260.
Auret, L., & Aldrich, C. (2011). Empirical comparison of tree ensemble variable importance measures. Chemometrics and Intelligent Laboratory Systems, 105(2), 157–170.
Blattberg, R., Kim, B. and Neslin, S., 2010. Database Marketing.
Genuer, R., Poggi, J., & Tuleau-Malot, C. (2010). Variable selection using random forests. Pattern Recognition Letters, 31(14), 2225–2236.
Gregorutti, B., Michel, B., & Saint-Pierre, P. (2015). Grouped variable importance with random forests and application to multiple functional data analysis. Computational Statistics & Data Analysis, 90, 15–35.
Gregorutti, B., Michel, B., Saint-Pierre, P. (2017), ‘Correlation and variable importance in random forests’. Stat. Comput. 27(3), 659–678.
Guyon, I., Weston, J., Barnhill, S., & Vapnik, V. (2002). Machine Learning, 46(1/3), 389–422.
Nason, M., Emerson, S., & LeBlanc, M. (2004). CARTscans: A tool for visualizing complex models. Journal of Computational and Graphical Statistics, 13(4), 807–825.
Nicodemus, K., & Shugart, Y. (2007). Impact of linkage disequilibrium and effect size on the ability of machine learning methods to detect epistasis in case-control studies. Proceedings of the Sixteenth Annual Meeting of the International Genetic Epidemiology Society, 31, 611.
Parr, T., Turgutlu, K., Csiszar, C. & Howard, J., (2018). Beware Default Random Forest Importances. Explained.ai. Accessed Mar 13, 2019, from https://explained.ai/rf-importance/
Strobl, C., Boulesteix, A., Kneib, T., Augustin, T., & Zeileis, A. (2008). Conditional variable importance for random forests. BMC Bioinformatics, 9(1).
Toloşi, L., & Lengauer, T. (2011). Classification with correlated features: Unreliability of feature ranking and solutions. Bioinformatics, 27(14), 1986–1994.
X. Yaya, L. Xiu, E. W. T. Ngai, & W. Ying. (2009). Customer churn prediction using improved balanced random forests. Expert Systems with Applications, 36(3), 5445–5449.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this paper
Cite this paper
Dumitrache, A., Stancu, S., Stefanet, M. (2021). Measuring the Importance of Churn Predictors in Romanian Telecommunication Industry. In: Bilgin, M.H., Danis, H., Demir, E., Vale, S. (eds) Eurasian Economic Perspectives. Eurasian Studies in Business and Economics, vol 16/1. Springer, Cham. https://doi.org/10.1007/978-3-030-63149-9_8
Download citation
DOI: https://doi.org/10.1007/978-3-030-63149-9_8
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-63148-2
Online ISBN: 978-3-030-63149-9
eBook Packages: Economics and FinanceEconomics and Finance (R0)