Customer Churn Prediction Using Ensemble Techniques And Algorithms

Abstract

Customer churn or customer attrition is the phenomenon where customers of a business discontinue buying or communication with the organization.  A high churn means that a higher number of customers no longer want to buy goods and services from the business. Customer churn rate or customer attrition rate is the mathematical calculation of the percentage of customers who are not likely to make another purchase from a business. Customer churn happens when customers decide to not continue purchasing products/services from an organization and end their association. It is an integral parameter for the organization since acquiring a new customer could cost almost 7 times more than retaining an existing customer. Customer churn can prove to be a roadblock for an exponentially growing organization and a retention strategy should be decided in order to avoid an increase in churn rates. Customer churn is a critical aspect of business operations, and understanding its causes and implementing effective strategies to mitigate it is essential for long-term success.In this research work, different models are used to predict the rate of customer churn rate and it is found that Random forest gives a preferable accuracy.