4.6 Article

B2Boost: instance-dependent profit-driven modelling of B2B churn

Journal

ANNALS OF OPERATIONS RESEARCH
Volume -, Issue -, Pages -

Publisher

SPRINGER
DOI: 10.1007/s10479-022-04631-5

Keywords

B2B customer churn; Cost-sensitive learning; Churn; Data mining; Profit-driven model evaluation; Retention strategies

Ask authors/readers for more resources

This paper aims to enhance the current practices in business-to-business (B2B) customer churn prediction modelling by introducing a novel expected maximum profit measure and a gradient boosting classifier called B2Boost. By considering customer value and company profit, this study improves the current practices and shows significant expected maximal profit gains.
The purpose of this paper is to enhance current practices in business-to-business (B2B) customer churn prediction modelling. Following the recent trend from accuracy-based to profit-driven evaluation business-to-customer churn prediction, we present a novel expected maximum profit measure for B2B customer churn (EMPB), which is used to demonstrate how current practices are suboptimal due to large discrepancies in customer value. To directly incorporate the heterogeneity of customer values and profit concerns of the company, we propose an instance-dependent profit maximizing classifier based on gradient boosting, named B2Boost. The main innovation of B2Boost is the fact that it considers these differences and incorporates them into the model construction by maximizing the objective function in terms of the EMPB. The results indicate that the expected maximal profit gains made in our analyses are substantial. This study arguments towards both deploying models based on customer-specific profitability differences, as well as evaluating based on our instance-dependent EMPB measure.

Authors

I am an author on this paper
Click your name to claim this paper and add it to your profile.

Reviews

Primary Rating

4.6
Not enough ratings

Secondary Ratings

Novelty
-
Significance
-
Scientific rigor
-
Rate this paper

Recommended

No Data Available
No Data Available