Term project (Sample Attached)
INTRODUCTION
In these modern day competitive business environment, every business strives to grow and mostly need to retain their customers to increase organizational growth, development and effective performance. This analysis focuses on using Customer behavior data to improve Customer Retention.
The Churn rate is the number of Customers or subscribers who stop subscribing to a service or company, which means these Customers have “Churned”. Telecommunication companies are concerned about the number of Customers leaving their service. For this reason, they need to understand who is leaving and why they are leaving.
To analyze this, we are provided with data set which includes information about:
Customers who left within the last month – the column is called Churn
Services that each Customer has signed up for – Phone, Multiple lines, Internet, Online Security, Online backup, Device Protection, Tech Support, Streaming TV and Movies.
Customer Account Information – how long they’ve been a Customer, Contract, Payment Method, Paperless billing, Monthly Charges and Total Charges
Demographic Information about Customers – Gender, Age range, if Customers have Partners and Dependents.
ANALYZING DATA THROUGH VISUALIZATION USING WATSON ANALYTICS
1. Most Commonly Used Internet Service.
The Fiber Optics Internet Service is the most used Internet Service by the Customers as shown in the blue bar.
2. Most Used Payment Method and Contract
The representation indicates that both Female and Male Customers mostly used the Electronic Check Payment Method with the Month-to-Month Contract which is shown in the blue bar.
3. Internet services used with Phone Services
The representation shows that the Fiber Optics Internet Services is commonly used with the Phone Services which is indicated in the yellow bar.
4. Most used Statement Method
The pie chart indicates that Customers mostly used the Paperless Statement method which is displayed in green color.
5. What drives Churn?
The key drivers are Tenure, Total Charges, Monthly Charges, Contract, Online Security and Internet. The spiral visualization shows how one driver (Tenure) drives Churn at a time which is in blue dots and also how two drivers drives Churn which are in orange dots.
6. What is the Predictive Model for Churn?
Using Decision Tree, decision rules show Contracts and thirteen (13) other rules predict Churn which are displayed in green colours with a Predictive strength of 80%.
7. Contract and Internet Services drives Churn
From the above representation, Month-to-month customers using Fiber Optics are majorly the Churned customers which indicates that both Contract & Internet Services drive Churn and it is represented by the green color.
8. Tenure drives Churn
The customers with Tenure <5 are mostly the Churn Customers whereas Customers with Tenure >5 are the least Churn Customers which are shown in the green colour bars.
9. What drives Total Charges?
Several combined and Single inputs drive Total Charges, the Combined inputs are majorly Monthly Charges & Tenure, Internet Service & Tenure, Streaming TV & Tenure, Streaming Movies & Tenure, Device Protection & Tenure. The Combined drivers are indicated in orange dots. Some other Single inputs drive Total Charges which are majorly Tenure and Monthly Charges amongst others and are indicated in blue dots.
1. What is the predictive model for Total Charges?
Using the Decision Tree, the Decision rules show that Tenure and 11 other inputs predict Total Charges with a predictive strength of 97%.
Conclusion
Analyzing the Telco Customer Churn Dataset using various virtualization, analysis and statistical tool and methods such as the Watson Analytics, IBM SPSS Modeler as well as the Microsoft Excel using the Pivot table, we concluded that the three (3) key drivers of Churn are Tenure, MonthlyCharges and TotalCharges. Furthermore, we discovered that Customers with Tenure<5years are mostly the Churn Customers while Customers with Tenure>5months are the least Churn Customers.
Based on this analysis, Customer Retention Programs such as promotional discounts should be considered for Customers with Tenure<5months so as not be a Churn Customer while Loyalty Rewards discounts should be considered for Customers with Tenure>5years to retain them as long-term customers.