Improved Customer Churn Behaviour by using SVM

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056
Volume: 04 Issue: 08 | Aug -2017 www.irjet.net p-ISSN: 2395-0072
© 2017, IRJET | Impact Factor value: 5.181 | ISO 9001:2008 Certified Journal | Page 2364
IMPROVED CUSTOMER CHURN BEHAVIOUR BY USING SVM
Deepika Mahajan1, Rakesh Gangwar2
1M.tech Scholar Department of Computer Science & Engineering, Beant College of engineering and technology
Gurdaspur, Punjab
2Assistant Prof Department of Computer Science & Engineering, Beant College of engineering and technology
Gurdaspur, Punjab
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Abstract - Churn Prediction has been major research
problem with the growth of market developmentascustomers
asset more valuable persons for growth of company. The
proposed Hybrid approach is an integration oftwotechniques
named random forest and Support Vector Machine (SVM)
provides better and accurate results in the predictionofchurn
customers The proposed Hybrid approach is implemented in
MATLAB with Statistics toolbox on the dataset of customers
having 3333 instances and 21 attributes to evaluate the
performance of proposed Hybrid approach. Various
parameters are to be considering into experiment in
enhancing the performance of Hybrid approach. The
experiment results reveal good distinction of churn and loyal
customers from the given dataset and provide more accurate
and satisfactory results when the Hybrid approach is
compared with various classifiers or algorithms.
Key Words: Customer churn behaviour, Churn
customers, CRM.
1. INTRODUCTION
An organization contains huge volume of data and it is not
possible to make prediction on huge amount of Data. There
is need to extract useful data so that predictionscanbemade
on them. Data mining is the process of preparing useful or
meaningful, takenfromlarge Databases(A.churiandR,Mahe,
2015). Converting raw data into useful data inorder tomake
patterns is called Data Mining.
Fig 1. Data Mining Technique
2. Customers relationship management (CRM)
CRM can be defined as a set of business activities to increase
business performance in customer management. Customer
demands can be changed with time variation. CRM
relationship is understandable by customer life cycle or
customer lifetime. The goal of CRM is to ensure customer
satisfaction and delight at every level of interface with the
company.‘CRM’ refers to managing relationship with
customers. It is a process or method used to learn more
about customers need and behaviors in order to develop
strong relationships with customers. It is type of
Management, which is used to satisfy the customer needs.
The loyalty of customers depends on their satisfaction of
product or service.
CRM helps to manage the churn customers in the company. It
helps to attract the new customers. There exist four
dimensions of CRM - Customer Identification, Customer
attraction, Customer Retention and Customer development
(K.Rodpysh and M. Majdi, 2012).
 Customer identification: CRM begins with acquiring
customers to the company by indentifying them. This is
phase where people want to become customers or most
profitable persons for the company. This is basically
related to group of customers as they may lead to profitor
loss of company.
 Customer attraction: This phase of CRM helps to make
long relationship with their customer by providing them
numerous offers such as discount on product, free
products etc. Customer attraction depends on the
satisfaction of products. Satisfiedpersonshelptoincrease
the retention rate by providing positive information to
new employees. It becomes major role to attract the new
customers as churn customers likely to move from one
company to another.
 Customer retention: It occurs when company fulfill the
needs of customers. A customer can retainthemselvesina
company only when their needs are fulfilled or they are
satisfied with the service given by existing company. To
retain the customers in the company, it becomes
necessary to complete the demands of the customers.
Data mining
Decision trees
SVM
Random forest
Neural network
Logistic regression

Fig2 : CRM Framework
CRM process can be defined as activities to manage the
customer relations by grouping them according to behavior.
It helps to make perceptions by identifying customers,
customer knowledge preparation and by building customer
relationships. Basically CRM process can be grouped into
different parts- Vertical & Horizontal process, Front & Back
office and Primary & Secondary process and three levels-
Customer Facing level, Functional level and Companywide
level into three levels- Customer Facing level, Functional
level and Companywide level.
3. Literature survey
Dr. M. Balasubramanian and M. Selvarani (2014) used
KDD (Knowledge Discovery in Data Mining) to hold the
churn members in the company, as competitor’sincreasesat
high rate. KDD is performed with using two categories
hypothesis and Discovery Oriented. Thelimitationarisewith
the model is that it only helps to predict churn customers,
not to determine the appropriate solution to retain them in
company. The methodologies used by them were Data
Acquisition, Data Preparation,DerivedVariableandVariable
extraction. With the selection of appropriate attributes and
fixing threshold values, accurate results may be produced.
M. Lapczynski (2014) developed a hybrid model of C& RT
logit model by integration of decision tree and logistic
model.Hybrid model produce improved results than basic
logistic model as it used decision tree with it. It provider
better results when compared to single DT. The hybrid
approach also helps to obtain different probabilities of each
test case. Decision trees help to detect lack of data and
logistic regression extend the interpretation. At each test,
unique predicted probabilities are obtained. The limitation
that arises during research is that Hybrid C& RT -logitcanbe
applicable only to Single Decision tree.
S.Sonia and Dr. C. Nalini( 2014) usedMapreducetopredict
the churn customers in telecom industry, Mapreduce and
HDFS( Hadoop Distributed File system) helped to mine the
large dataset. The use of hadoop MapReduce resolved the
problems of data mining. MapReduce used to provide the
good performance in the form of reliability; scalabity and
efficiency. Mapreduce helps to reduce data size, hence in
reducing complexity. NameNode, and the DataNodes for
HDFS JobTracker and the TaskTracker nodes For
MapReduce nodes are used for analysis. HadoopNameNode
is converted into Hadoop Distributed File System.
HMapReduce help to predict churn customers that lead to
produce customized approach for retention methods.
Manjari Anand et al. (2014) implemented ART (Artificial
Resonance Theory) algorithm to perform the customer
classification based on the choices. The dataset was taken
from the company having vehicles on sale. Classification of
customers canbeimplementedusingARTalgorithmand was
compared with back propagation algorithm. ART algorithm
was proved to as better algorithm for the classification
customers and found to use less time for customer
classification. This algorithm used less time complexitythan
propagation algorithm. ART algorithm provides the best
time complexity and was implemented in MATLAB.
Manjeet kaur and Dr.Kawaljeet Singh (2013) elaborated
guidepost on exchanging unnecessary client information of
a bank into effective and useful information with DM
techniques like naive bayes, decision trees and SVM to pick
out important client features to predict churn . The
methodology is made of data sampling, data preprocessing,
model construction, and model evaluation phases . Churn
rate success is greater than loyal class when prediction is
made. The prediction of loyal customers is more than churn
customers when all algorithms are analyzed.
N.Kamalraj and Dr.A.Malathi(2013) determine the
possible churners using the predictive data mining model.
The main goal of the research is to get the complete
investigation about the dataanalysisinthecritical processto
precede the successful data mining application. It is used to
investigate the data analysis; robust predictive model canbe
built by discovering the significant churn factors. It also
examines in keeping the predictive models to make the
mobile operators in order to perform them accurately. The
techniques are used for the large data sets of the
telecommunications industry.
R .Obiedat and O. Harfoushi (2013) implemented Hybrid
approach of K-mean clustering and Genetic Programming to
predict churn customers. K-mean clustering is used to filter
the dataset and Genetic Programming helps to classify the
customers into churnersand non-churners.Fourclusters are
to be used out of two clusters are discarded. Selected
classifiers are loaded into model and results are compared
with C4.5, ANN and GP with accuracy and churn rate. The
accuracy rate does not classify exact churn and loyal
customers, which is main limitation of this hybrid approach.
Customer
identificatio
n
Customer
retention
Customer
attraction
Customer
developm
ent
CRM
Cross
Selling
Up-
selling
Value
Analysis

S.Nabavi and S.Jafari(2013) implemented CRISP-DM (
Cross Industry Standard Process for Data Mining) on RFM (
Recency, Frequency and Monetary) with two different
technologies named RandomForest and Boosted technique
on the dataset of Solico food industry. The churn customers
are to be predicted and effective measures are to be planned
in retaining them. It helps to identify churn customers using
customer behavior analysis and variables. Among all
variables, LOR, Relative Frequency and average inter
purchase time are best predictors for churn prediction.
Dr.U. Devi andS.Madhavi(2012)usedCART(Classification
and Regression Tree) and C5.0 on the Dataset of Bank
customers. Trees are grown and then pruned back. With
CART, it becomes easy to split data into binary and make
patterns for remaining data. Data Mining is used to convert
raw Data into useful information. CART provides high
success rate of churn class and C5.0 gives high success rate
of active class. Effective churn prediction model help to
attain benefits from its efforts. Holding 5 percent of old
customers can increase the profit of company by 25percent.
4.Experimentation and Results
A. METHODOLOGY
Step 1: Start the Algorithm.
Step 2: Now SVM is implemented and its performance to be
checked
Step 3: New Hybrid approach for the churn prediction is to
be implemented and comparisons
Step 4: Now comparisons are to be made in order to predict
the accurate model from existing and purposed Hybrid
Step 5: Stop the Algorithm.
Fig 3: Proposed methodology
B. PERFORMANCE ANALYSIS
This paper has designed and implemented the proposed
technique in MATLAB tool u2013a. The evaluation of
proposed technique is done on the basis offollowingmetrics
i.e. Accuracy, F-measure, true positive rate, kappa statistics,
error rate. A comparison is drawn between all the
parameters with existing and proposed algorithm and
figures shows all the results.
1. Accuracy, Error rate and RAE
It is defined as number of instance perclassesthathavebeen
correctly identified. It relates to those instances, which are
being identified as correct or positive while making
predictions.
It can be defined as number of instances that have been
negatively classified. It is also called Error rate. It isbasically
related to the wrong predictions or incorrect predictions.
RAE is proportional to simple forecaster. RAE accepts total
absolute error and anneals it by dividing by total absolute
error of simple predictor.
Table 5.5, it has been clearly indicated that proposed Hybrid
approach provides the better, results that is accuracy than
existing. Higher the accuracyrate,higher will betheoutcome
produced. Accuracy rate is linked with the improvement of
purposed algorithm. Highest value in Accuracy and lower
values in Error rate and RAE shows the improved results
obtained by purposed algorithm againstexistingalgorithms.
Table 1.Analysis of different parameters
Algorithm
Name
Accuracy Error rate Root Absolute
Error(RAE)
AdaBoostM1 86.4787% 13.1213% 73.0989%
random forest 95.3596% 4.2404% 33.0781%
SVM 88.2588% 11.4412% 68.39%
Logistic
Regression
86.3887% 13.3113% 75.5602%
PART 96.1496% 3.5504% 26.0567%
Decision Table 91.2791% 8.3209% 60.5888%
Filtered
Classifier
94.1394% 5.5606% 40.2962%
Bayes Network
Classifier
94.2894% 5.4106% 42.6417%
Purposed
Hybrid
approach
97.1997% 2.5003% 17.6552%
We have studied various algorithms based on Data Mining
and Hybrid approach of random forest and SVM provides
better and accurate results when comparisons are made on
various algorithms.
Start
Implement the existing algorithm
and check the performance
Implement the purposed hybrid
approach and check the
performance
Compare the results between
existing and Hybrid approach
Stop

Fig 4.Analysis of different parameters
2. RRSE, Coverage Cases, Mean rel. region size
Root relative Squared Error (RRSE) is mean of genuine
values. It takes the total squared error and shortensthefault
of same attributes as amount being forecasted.
Number of coverage cases refers to the steps in which
calculations are made. Number of coverage cases may be
high or low based on the accuracy results.
Mean Absolute Error (MAE) is used to appraise that how
close the anticipations are to the actual values.
Table 5.6 shows the improved and enhanced results thatare
made with the help of new proposed hybrid algorithm by
using RRSE, coverage of cases and Mean Rel. region size.
Coverage of cases shows the number of cases that has been
covered with the algorithmduringtheimplementationofthe
code.
Table 2. Analysis of different parameters
Algorithm
Name
RRSE Coverage of
Cases
Mean rel.
region size
AdaBoostM1 85.1074% 99.2899% 91.1091%
random
forest
58.305% 95.3596% 50%
SVM 81.0629% 98.5999% 76.1976%
Logistic
Regression
87.0518% 99.0089% 81.0581%
PART 51.0611% 99.0089% 60.3911%
Decision
Table
76.5574% 98.7449% 85.1835%
Filtered
Classifier
63.456% 98.1798% 63.6664%
Bayes
Network
Classifier
59.5792% 99.2899% 68.3119%
Purposed
Hybrid
approach
42.2864% 98.7499% 54.3554%
Fig 5.Analysis of different parameters
5. CONCLUSION
The occurrence of churn customers puts adverse impact on
the profit of company. Therefore, it becomes necessary to
predict the accurate churn customersandloyal customersso
that proactive measures could be taken in consideration in
order to retain the customersintothecompanyascustomers
are valuable persons to the growth and survival ofcompany.
We have studied various algorithms based on Data Mining
and Hybrid approach of random forest provides better and
accurate results when comparisons are made on various
algorithms.
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