Mining churning behaviors and developing retention strategies based on a partial least squares (PLS) model

Abstract

In a very competitive mobile telecommunication business environment, marketing managers need a business intelligence model that allows them to maintain an optimal (at least a near optimal) level of churners very effectively and efficiently while minimizing the costs throughout their marketing programs. As a first step toward optimal churn management program for marketing managers, this paper focuses on building an accurate and concise predictive model for the purpose of churn prediction utilizing a partial least squares (PLS)-based methodology on highly correlated data sets among variables. A preliminary experiment demonstrates that the presented model provides more accurate performance than traditional prediction models and identifies key variables to better understand churning behaviors. Further, a set of simple churn marketing programs device management, overage management, and complaint management strategies is presented and discussed. (C) 2011 Elsevier B.V. All rights reserved.