Analyzing customer churn behavior using datamining approach: hybrid support vector machine and logistic regression in retail chain

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Barzegar Mohammad; Hasani Aliakbar

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Journal Paper

Paper Information

Journal: INTERNATIONAL JOURNAL OF RESEARCH IN INDUSTRIAL ENGINEERING Year:2024 | Volume:13 | Issue:4 Page(s): 384-398

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Information Journal Paper

Title

Analyzing customer churn behavior using datamining approach: hybrid support vector machine and logistic regression in retail chain

Author(s)

Barzegar Mohammad | Hasani Aliakbar | Issue Writer Certificate

Keywords

Customer churn

Data mining

logistic regression

Support Vector Machine

Machine Learning

Abstract

Customer churn is one of the challenges of business management in today's complex competitive environment. For this purpose, the organization must have an efficient system to detect and analyze the factors influencing customer churn. To conduct this research, an attempt has been made to build a hybrid model based on data mining approaches from information related to 5830 customers of a chain store (demographic information and information based on customer purchase records) with 17 qualitative and quantitative characteristics. The features of higher importance were identified to build the model in the first stage using the logistic regression algorithm. In the second stage, the support vector machine algorithm, a critical supervised learning algorithm, was used to classify the customers and rank the essential features. Finally, the proposed model has been implemented as a case study in the chain store industry. The results indicate the optimal efficiency of the proposed analysis method. This research has been done to identify the influential factors in customer churn and focus on providing new solutions to reduce churn in the retail industry. Also, the results show that age, marital status, and average monthly income from the set of demographic features and how to get to know the store, the share of online shopping, and special sales from the set of features related to customer transaction records are among the most important factors affecting customer churn. In addition, practical suggestions have been presented that can be used for tactical and strategic planning of chain stores to attract and retain customers.

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