Journal of Marketing Research · 2006 · 70 citations · 13 references
BusinessBusiness AnalyticsMarketingMarketing AnalyticsPredictive AnalyticsStatistical ModelingChurn AnalysisChurn ManagementCustomer Behavior AnalyticsCustomer Churn PredictionCustomer SegmentationPredictive ModelingAccuracyCalibration Data AnalysisChurn AnalyticsChurn DetectionChurn ModelingCustomer Churn MeasurementCustomer Churn ModelingPredictive Performance
The study examines how methodological choices affect the accuracy of customer churn prediction models. The authors organized a competition where participants built churn models from publicly available data and evaluated them on two validation sets, varying estimation techniques, variable selection, model size, and development time. The results show that methodological choices significantly influence predictive accuracy, with performance differences potentially affecting campaign profits by hundreds of thousands, while models remain robust over a three‑month horizon and distinct modeling approaches yield varying results.
This article provides a descriptive analysis of how methodological factors contribute to the accuracy of customer churn predictive models. The study is based on a tournament in which both academics and practitioners downloaded data from a publicly available Web site, estimated a model, and made predictions on two validation databases. The results suggest several important findings. First, methods do matter. The differences observed in predictive accuracy across submissions could change the profitability of a churn management campaign by hundreds of thousands of dollars. Second, models have staying power. They suffer very little decrease in performance if they are used to predict churn for a database compiled three months after the calibration data. Third, researchers use a variety of modeling “approaches,” characterized by variables such as estimation technique, variable selection procedure, number of variables included, and time allocated to steps in the model-building process. The authors find important differences in performance among these approaches and discuss implications for both researchers and practitioners.
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Multivariate Adaptive Regression Splines
Jerome H. Friedman · The Annals of Statistics · 1991 · 8.1K citations · Full text
Analysis of Incomplete Multivariate Data
David E. Booth, Joseph L. Schafer · Technometrics · 2000 · 5.7K citations