Customer Retention Based on BP ANN and Survival Analysis

"Customer retention" is an increasingly pressing issue in today\´s ever-competitive commercial arena. This is especially relevant and important for sales and services related industries. This paper focus on constructing a new customer retention framework based on BP ANN (artificial neural network) and survival analysis. The new customer retention framework constituted of two parts, one is the BP ANN survival analysis model which integrates ANN technology and survival analysis to predict customer likelihood of defection and estimating customer value, the other is CLV (customer lifetime value) & CSP (customer survival phase) segment model which segment customer into different cluster to target high value, retainable customer. Effective actions triggered by these models could be the key to eventual customer retention. The empirical analysis is based on 23560 customers selected from the data warehouse of a large Chinese telecommunications company. This paper also suggests some propositions for further research.