Using CLV for modelling churn and customer retention

Abstract

Preventing customer churn and trying to retain customers is the main object of customer churn management. This paper proposes a model to measure churn probability and introduces a policy to retain customers. Using existing datasets of customers, we calculated CLV and used the C5.0 technique to predict churn probability for each customer. We also used process mining to find a policy to retain each customer separately. The model was simulated using a super market chain (Refah) and the results show the model is performing much better than previous proposed models. A computer result is shown. Copyright © 2012 Inderscience Enterprises Ltd.