CASE STUDY: JMP030

Customer Churn

From Building Better Models With JMP® Pro, Chapter 7, SAS Press (2015). Grayson, Gardner and Stephens.

Used with permission. For additional information see

https://www.jmp.com/en_us/academic/building-better-models.html

Key Concepts: Neural networks, activation functions, model validation, confusion matrix, lift, prediction profiler, variable importance

Dr. Jim Grayson

Augusta University

Sam Gardner

Eli Lilly

Mia Stephens

JMP

Objective

Analyze the factors related to customer churn of a mobile phone service provider. The company would like to build a model to predict which customers are most likely to move their service to a competitor. This knowledge will be used to identify customers for targeted interventions, with the ultimate goal of reducing churn.

Background

Customer retention is a challenge in the ultracompetitive mobile phone industry. A mobile phone company is studying factors related to customer churn, a term used for customers who have moved to another service provider.

The Task

The company would like to build a model to predict which customers are most likely to move their service to a competitor. This knowledge will be used to identify customers for targeted interventions, with the ultimate goal of reducing churn.