...Churn Prediction Vladislav Lazarov vladislav.lazarov@in.tum.de Technische Universität München Marius Capota Technische Universität München mariuscapota@yahoo.com ABSTRACT The rapid growth of the market in every sector is leading to a bigger subscriber base for service providers. More competitors, new and innovative business models and better services are increasing the cost of customer acquisition. In this environment service providers have realized the importance of the retention of existing customers. Therefore, providers are forced to put more efforts for prediction and prevention of churn. This paper aims to present commonly used data mining techniques for the identification of churn. Based on historical data these methods try to find patterns which can point out possible churners. Well-known techniques used for this are Regression analysis, Decision Trees, Neural Networks and Rule based learning. In section 1 we give a short introduction describing the current state of the market, then in section 2 a definition of customer churn, its’ types and the imporance of identification of churners is being discussed. Section 3 reviews different techniques used, pointing out advantages and disadvantages. Finally, current state of research and new emerging algorithms are being presented. given a huge choice of offers and different service providers to decide upon, winning new customers is a costly and hard process. Therefore, putting more effort in keeping churn low has become...
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...Client Issue Rogers Communications Inc. is a Canadian Telecommunications company operating in the fields of Wireless, Cable (Internet, Television and Phone), as well as Media services. Over the past few years, the competition in the Telecommunications industry in Canada has intensified. Not only have existing major competitors, the so called “Big Three” operators of Rogers, Bell and Telus, begun to clash more intensively, the market place is attracting many fast growing new entrants as well. To achieve its growth goals, Rogers need to determine an optimal set of corporate level strategy and business level guiding policies to maintain its market leader position in the long term. Rogers need to seek ways to leveraging its resource strength and improving upon its weaknesses to develop a long-term sustainable competitive advantage in this highly competitive industry. Evaluation Criteria With growth in mind, the strategic decision must take into account the following criteria: 1. Leads to sustainable long-term competitive advantage 2. Growth forecast (Industry and Segment conditions, Market Trends) 3. Competitive viability (Barriers to Entry, Substitutes) 4. Achieves competitive cost structure Strategic Recommendation: Integrated LTE (4G) Wireless Technology The advanced LTE network boasts higher efficiency, faster speeds, and broader bandwidth capabilities. As wireless devices continual to demand for better network performance, the upgrade to the more sophisticated...
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...|Training and Costing Proposal | | | |Course: HRMT 160 | |Section: 1500 | |Dr. Lyle Benson | |October 1, 2010 | NCO Financial Services is worldwide outsourcing company. They operate in North America as well as In Mexico and Australia. NCO’s motto is “Your career is our investment…imagine your future”. For the purpose of this report we will be focusing on the Edmonton branch. The Issue In the last six months their attrition rate has skyrocketed. In February 2010 the rate was 4.23%, March 4.97%, April 6.12%, May 7.93%, June 8.17%, July 8.45%, August 10.67%. High attrition leads to higher compensation costs for the company. If the organization hires someone, they have not only spent money on training, but also on the cost of recruiting as well. If an employee leaves abruptly, then the company has not had time to recoup the money spent on the training and recruiting. The process will have to start over again and if this happens to often then the organization may put a freeze on dollars given for recruitment. Poor retention not only affects the company’s bottom line but also moral of the current employees. The burden of picking up the slack falls on current employees. This can cause extra strain on the relationship the employee...
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...Verizon Wireless & Blizzard Entertainment an Environmental Scan University of Phoenix Strategic Management MGT/498 Jeff Portsche May 26, 2015 Verizon Wireless & Blizzard Entertainment an Environmental Scan Verizon Wireless and Blizzard Entertainment are both companies that provide a service to their customers in a highly competitive field. As such they both must actively engage themselves in the process of environmental scan to ensure the long term health of their companies in their respective markets and future markets. These environments are especially complex with these two companies since there are both external environments and internal environments. It is through the process of environmental scan that these companies can determine what their competitive advantages are in the present as well as in the future. Each company must look to the future and determine what measurement guidelines they will be using to measure their success in the next five to ten years. The effectiveness of their measurement guidelines must be examined as well. In the end, a company is only as good as its ability to examine itself from the inside and out. The external environments of both Verizon Wireless and Blizzard Entertainment are complex. This is due mostly to the fact that both companies are in a highly competitive and ever changing market. In addition to the change, both are in a highly regulated market by the governments they deal with. Verizon Wireless must abide...
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...ARPU, average revenue per user, and MOU, minutes of use, are two units of measurements telecom companies use to measure performance. These units of measurements indicate how well a business is performing, for example, ARPU displays the amount of money specific consumers spends on products or services. Usually, APRU is used for multiple combinations of product consumption, like combinations can include voice calling, text messaging and a data plan. MOU, on the other hand, measures on average how long each a consumer uses a product or service per month. MOU permits telecoms to produce appropriate pricing based on how much the user consumes on a monthly basis. Most businesses are capable of generating packages and promotions based on the consumers demand. With this, businesses can build better packages to make it more appealing to their customers, at the same time this helps increase their revenue. Hangzhou City Branch used both the ARPU and MOU to evaluate the performance of various campaigns to better understand which campaigns were effective and which needed to be eliminated. The use of EDW and OLAP, allowed the city learned that physical outlets and call centers were the most successful channels to make sales. Incorporating what they’ve learned, Hangzhou had more employees at it’s’ call centers. This resulted in a huge increase from 2 to 30 perfect in success rate (Whang 8). The new results were then shared with HQ to decide whether to transfer this information to 10 other...
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...Overall Case Summary Ted Katagi was recently put in charge of turning around the struggling Kansai Digital Phone Company. They are trying to compete in the Kansai market against three main competitors (DoCoMo, Cellular, Tu-Ka) and three PHS startups. Katagi and his team have developed several initiatives to try and turn themselves into a customer-centric organization. These incentives include: * Zutto - Operating without contracts. The customer pays up front and receives some benefit at the end of the commitment period in an attempt to elicit behavior (such as paying for another period) * Welcome Calls – Personal contact with each new customer in an attempt to keep customers from switching carriers. * Brand Strategy – Sign movie stars to produce a trendier image, and brand with a different name (J-Phone) that doesn’t make them sound like a regional operation. * Upgrade Mailing – Offer free upgrades for renewed service. * Expanded direct sales – An attempt to develop a bond with customers and increase loyalty. * Channel Incentives – Agents will be rewarded for enrolling higher value customers. * Subsidized calling plans – Cheaper plans targeting part of the population that does not have phones. Ted and his team have to decide which initiatives will provide the most benefit to Kansai and demonstrate the value those initiatives would provide. Case Questions 1. What is the value of a KDP customer in 1997? For this calculation you may want...
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...milestone was a great achievement for the 3 year old start- up company, they have a problem on hand. HubSpot needs to decide on which segment to focus on: “Owner Ollies” (OO), “Marketer Marys” (MM) or both. Although a focus on one segment or the other might allow HubSpot to create efficiencies and help them increase their acquisition rate within that segment, our analysis has led us to conclude that they should continue to target both OOs and MMs. From a quantitative perspective we conducted the customer lifetime value calculations. In order to derive the MM and OO lifetime values, we separated both the MMs and OOs into CMS vs. non-CMS users, and also segmented the OOs into “small business” and “very small business” based on different churn rates. Based on our market share assumptions (Exhibit 1) we determined the total potential market in each segment, and used the CMS usage statistics to determine how many of each would be CMS users. We then multiplied the size of each segment by the customer lifetime value of each segment (Exhibit 3 shows the CLV calculation for one segment, Exhibit 2 shows the different inputs used for all 5 segments). Our preliminary analysis favored OOs with over $101 million in potential profits versus $87 million from the MMs (Exhibit 4). Also, based on our CLV analysis the OOs have the additional benefit of becoming profitable in month 6 (Exhibit 3), where the MMs don’t become profitable until month 13 due to high acquisition costs. Although...
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...analysis of customers. To acquire this type of customer, it costs $5,000. But if HubSpot acquire Marketer Mary successfully, it has lower churn rates, 3.2%, compared with Owner Ollies’ 4.3%. Marketer Mary accounts for 31% of HubSpot’s customer portfolio in 2009. Should HubSpot (HS) target Marketer Mary segment? 3Cs analysis: Company: + The products that Hubspot provide meet sophisticated needs of MM, because HS provides complete series of inbound marketing tools -Might consider to rebuild pricing model for MM. As their business needs is more complicated, but the start-up consulting fee is the same as OO +Roberge thinks they can get more money on MM because OO has a lot of macroeconomic risk, i.e. small business is risky during recession +/-Founders think it’s better to focus on one only one segment (p.11) +/- Volpe resist on using inbound marketing only, rather than combining both inbound and outbound Customer: +MM had more money to spend on HubSpot’s products (more affordable) -Need longer approval process. It needs to be signed up by high level of managers +HB’s products like analytics and reports are more attractive to MM, so MM will have higher acceptance rate of HB’s products. +MM will find HubSpot’s tools easy to use, as they are more educated and have web consultants. -MM is harder to acquire and it costs more. +Lower churn rate (3.2%) Competitor: +/- Most of competitors play in only one area of three types in customer funnel -Competitors in inbound...
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...STRENGTHS Strong brand name. Experienced in two different kinds of distribution Stationary trade Mail ordering Location. Geopolitical position is good for business. Co-existence in the region of 2 seaports and an international airport with direct possibility of export. Variety of exports possibilities. Large land resources. Existence of a powerful technical basis and building firms. Ecologically clean environment. 100 km of virgin beach. Historical diligence. Initiative of local municipal authorities, arranged cultural-educational network and possibilities of development. Tradition in industry and an availability of labour force. Superior product performance vs. competitors. Right product, quality and reliability. Expanded IT Sector. Highly skilled workforce. High budget and enough money for business. Less integrated than other big groups like Daimler or Smiths Industries so higher flexibility. WEAKNESSES Too loose supervision Sluggish communication Lack of a strategy for development of ports Bad transport communication with the port Bad organisation of intermodality (connections between transport systems) Inherited nature damages made by industrialisation. Inventory of environmental conditions is never made Demographical situation becomes worse Pessimistic attitude toward changes ...
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...target a new market segment. The following will be the structure of the new price plan, which employs a revolutionary and aggressive approach. Subscription Type All of the plans will be prepaid thereby completely eliminating the need for indulging into contracts. The subscription will come into packages that resemble consumer electronic packaging and would be plug_and_play when you buy them. Contracts: Since the plans will be all prepaid, the services will be offered without indulging into a contract. This will allow e.g. the teenagers 14-17 to be able to get the subscription because otherwise they are not eligible to sign the contracts. This is clearly an untouched segment and will bring lot of new customers. However the risk of churn will be increased to 6% per month, but that will be catered into pricing calculations given in the end. Handset Subsidies: All customers will be offered handset subsidies at 50% of the handset costs. This will reduce the subscription price and hence enabling the young customers to afford the plan. Hidden fees and Off-peak hours: All plans will have no hidden fees or charges. The price plans will includes all cost calculations and will be based on the idea as ‘what you see is what you get’. The peak and off-peak distinguishing will be completely eliminated and the buckets of minutes will have ‘any-time’ minutes, providing the...
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...POSITION : Specialist OOH, Trade activation South. Looks after south region. Khush.shah@mobilink.net Saturation issue so how is the revenue generated, how do they keep the revenues going? * Personal opinion, the thing is everyday trends are changing and price war and players are expanding it puts a lot of pressure. What we do is increase our ARPU (average revenue per user) * Introducing new products examples: value added services. * People have started changing their focus, data is our key focus. Infinite products can be introduced to win the hearts of customers. FOCUS in on innovative products How many new services introduced in the last 5 years? * Every year we introduce approx. 30-35 products * Aprox 35% yearly increase in products Is there any collaboration with Local handset manufacturing? * Partnership with international brands like blackberry and nokia. Collaborated with Samsung as well. They help us to introduce our product to their customers and we support them back. * Introduced nokia lumia recently. * The result is positive and increase in sales. No installment costs. Only marketing cost What is the supplier network, who makes the Sims and work on towers? Who makes the towers? * No info on sims or towers Objectives and sales targets, what pressure do you face. How do you deal with Anti-marketing? * Objective and sales target: we get targets every year, parent company give us growth objectives which are then divided within...
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...are customer churn analysis and apprehending methods, and trend analysis. Along with the customer churn profiling. Developing Customer Retention Strategies. Customer Retention is important because getting a new customer is expensive rather than keeping the existing one. Retention is meaningful to most companies because the cost of having new customers is much more than the cost of keeping good relationships with their current customers. How to contain customers during a downfall? During a downfall is the time when people look for a lower cost alternative. In these circumstances, down-selling can be key to retaining customers. When economy overcomes, the customers are likely to move up to the original services they had subscribed too. Down falling is better than losing customers. However that can have negative effects on sales, this should be carried out carefully on customers who are at risk of churning to lower cost alternatives, methods can be used to identify customers at risk of churning. Knowing why a customer leaves. The most important thing in customer retention is to know the customer well enough, know there expectations, satisfactions, and their tendencies. By knowing these about a customer the more efficient retention strategies can be developed. And this will be the key to successful retention marketing. Customer churn analysis and apprehending methods. The importance of a customer retention strategy is to recognize the customers who are likely to churn. Once they...
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...In order to assess the attractiveness of the video rental business, the industry necessitates an evaluation through the analytical lens of the five contending forces of competition. First, there is a significantly low threat of new entrants mainly due to high barriers of entry and economies of scale. For example, there are substantial capital requirements in construction of fixed facilities in strategic locations in order to distribute DVDs; there are also unrecoverable expenditures in up-front R&D and advertising costs, both of which are emphasized in order to differentiate service and build brand equity. There are also government policies to reinforce the barrier. For example, in addition to its red envelops, Netflix has patents to protect essential characteristics of its business model such as its “Max Out” and “Max Turns” approaches. This creates cost disadvantages through a greater learning curve for new entrants, especially when competing against algorithmic programs such as Netflix’s CineMatch, which becomes more effective at recommending movies as more subscribers provide feedback. Another governmental restriction is seen specifically with Amazon.com, whereby distribution channels are choked out in the US unless Amazon sacrifices its competitive advantage of avoiding sales tax. The second force of competition, the bargaining power of the supplier, is assessed as moderate to high. The movie studios and independent movie distributors provide the rights to distribute...
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...Justin Goldberg 10/22/14 Case: Palm Towers Introduction: Basis of the case is… This case is used to solve the problem of determining how much this company (the National Tower Company) should bid for the Palm Tower, if anything at all. Contrary to many of the other cases, this case is not a case of make or break. Alternatively, this is clearly a situation of a want and not a need, as CATO is mentioned nowhere here. It becomes evident from the beginning of the case that this is definitely a tower that comes with an abundance of value. In fact, the majority of working on this case is basically a forecast showing how much profit this investment could potentially provide. We would recommend just by previewing the case a bit that a bid should be made that is near the likely competitive forecast value for there are a few other rival companies that are very successful at the moment and will likely bid as well. The industry for these towers right now is a very competitive one as previously mentioned, this is because across the globe there are 6 billion cellular users who most of are in the process of upgrading from either 2g to 3g or 3g to 4g/LTE. This is useful information to keep in mind for the case because we try to forecast growth for this tower, which is currently sitting at 17% for a year-by-year basis, which is quite high compared to most other industrial growth averages. Unfortunately, while these major cellular companies are bringing in a majority share of the rent, numerically...
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...Case Study – HR at GTL Performance Appraisal Form of Talent Management Head a) Objectives: * Hiring culture fit employees * Talent Retention * Effective workforce planning b) Dimensions: Quantitative: 1. Cost per hire – A metric is designed to measure the costs associated with the sourcing, recruiting and staffing activities borne by an employer to fill an open position in the organization 2. Time to fill – From the time you advertise your vacancy till the time the candidate is actually on board 3. Performance of hired employees – Appraisal rating of employees joined after one year of hiring 4. Attrition rate – Attrition rates describe the rate at which employees leave a company Qualitative: 1. Aligning talent acquisition strategies with business needs – Identifying the business needs and aligning the talent acquisition strategy accordingly to contribute in fulfilling business strategy 2. Effective use of technology in hiring – Using the latest online mediums available (for example: portals, LinkedIn etc.) and targeting at reducing the cost c) Measures: S: Strengths to build upon P: Performs well & meets expectations D: Developmental needs I: Issue Dimension | Expectation | Actual | Measure | Quantitative | Cost per hire | 10% of CTC | 8% of CTC | S | Time to fill | 2 months | 3 months | D | Performance of hired employees | >= 3 | 3.5 | P | Attrition rate | < 6% | 5.8% | P | Qualitative | ...
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