Application of machine learning methods to analyze customer migration risk in terms of corporate financial security
Application of machine learning methods to analyze customer migration risk in terms of corporate financial security

Summary/Abstract: Effective prediction of customer migration is only possible through knowledge of the customer life cycle, which is characterized by the length of the relationship between buyer and provider, i.e. custo- mer retention. A concept of opposite importance is customer migration, defined as the partial or total abandonment of the products or services offered by a company. Its knowledge and ability to predict it is crucial in terms of ensuring the continued financial security of target companies. The primary objective of this article was to present a method for assessing the risk of telecom industry customer migration using machine learning methods. The main research problem was defined in the form of a question: is it possible to effectively support decision-making and marketing strategy development by using machine learning methods to minimise customer migration? The hypothesis of the research conducted was also defined: Iti s possible to effectively predict the risk of customer migration in the telecommunications industry based on machine learning models and using available databases.The objective was achieved through the use of research methods, theoretical deductions such as and induction, system analysis and synthesis, and mathematical modelling, which additionally allowed for a practical analysis of the migration of customers of the telecommunications industry. Predictors with the greatest impact on the phenomenon under study were selected. It should be noted that the gain chart indicates that, in the case of contacting the 20% of customers selected by the models, the target coverage would be at the following levels, respectively: 70% for the boosted tree model and the decision tree based on the CART algorithm, and 75% for the random forest model. The research niche addressed in the article is the development of methods for assessing migration risk using machine learning techniques. The tool developed in the article can support decision- -making in the creation of marketing campaigns aimed at retaining the largest number of customers.

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