Prediction of Customer Churn Behavior in the Telecommunication Industry Using Machine Learning Models

Victor Chang*, Karl Hall, Qianwen Ariel Xu, Folakemi Ololade Amao, Meghana Ashok Ganatra, Vladlena Benson

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Customer churn is a significant concern, and the telecommunications industry has the largest annual churn rate of any major industry at over 30%. This study examines the use of ensemble learning models to analyze and forecast customer churn in the telecommunications business. Accurate churn forecasting is essential for successful client retention initiatives to combat regular customer churn. We used innovative and improved machine learning methods, including Decision Trees, Boosted Trees, and Random Forests, to enhance model interpretability and prediction accuracy. The models were trained and evaluated systematically by using a large dataset. The Random Forest model performed best, with 91.66% predictive accuracy, 82.2% precision, and 81.8% recall. Our results highlight how well the model can identify possible churners with the help of explainable AI (XAI) techniques, allowing for focused and timely intervention strategies. To improve the transparency of the decisions made by the classifier, this study also employs explainable artificial intelligence methods such as LIME and SHAP to illustrate the results of the customer churn prediction model. Our results demonstrate how crucial it is for customer relationship managers to implement strong analytical tools to reduce attrition and promote long-term economic viability in fiercely competitive marketplaces. This study indicates that ensemble learning models have strategic implications for improving consumer loyalty and organizational profitability in addition to confirming their performance.
Original languageEnglish
Article number231
Number of pages21
JournalAlgorithms
Volume17
Issue number6
Early online date27 May 2024
DOIs
Publication statusPublished - Jun 2024

Bibliographical note

Copyright © 2024 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).

Data Access Statement

The authors do not own the data.

Keywords

  • explainable AI
  • predictive analytics
  • machine learning
  • customer churn prediction
  • ensemble learning

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