Predicting customer behavior in telecommunications

The wireless service subscriber calls a customer service representative to complain about dropped calls. During the conversation with the customer, the CSR views a display that shows this customer´s probability of churn-switching from this service provider to another-as well as the most probable reasons to churn and the best strategy to retain this customer. The CSR then quickly responds to the subscriber according to the system´s recommendation. This is an intelligent customer-care system designed to predict customer behavior. Predicting customer churn is a component in the decision framework for retaining customers and maximizing profitability. Companies can use these probability and revenue estimates in a decision-theoretic framework to determine a churn intervention strategy and a profitability optimization strategy. Predicting customer behavior helps service providers build customer loyalty and maximize profitability. For the success of a project, data preparation is often a critical part of the predictive algorithm.