Case Study
Reduction in Customer Churn Rate for a Leading Telecom Player
Business need
A telecom provider in Europe, with approximately 10 million customer base
Business Objectives / Goals
- Identify the factors responsible for the high customer churn rate; design and implement appropriate steps to reduce the churn
- Reduce customer campaign cost. Launch focused campaigns based on propensity of a subscriber to churn
Approach and Methodology
- Various data points such as demographics, contact information, product and services availed, offer/plan detail, months in service, bill amount, payment history, inbound and outbound call details, handsets used and service features were analysed
- Data preparation through exploratory data analysis, missing value and outlier treatment. Checked correlation and muticollinearity relationships for different parameters
- Developed a model using various techniques such as logistic regression, decision tree, concordance, etc.
- Tested and validated the model using a test sample; checked key statistics and performed out-of-time validation
- Implemented the model to identify customers with high propensity to churn
- Reached out proactively with better offers to a targeted subscriber segment – only the high-risk customers
Business outcomes
- 20% reduction in customer churn rate
- 35% decrease in customer campaign cost
