Hybrid Random Forest Survival Model to Predict Customer Membership Dropout

Sobreiro, Pedro; Garcia-Alonso, José; Martinho, Domingos; Berrocal, Javier

http://hdl.handle.net/10400.26/42054

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Abstract(s)

Dropout prediction is a problem that must be addressed in various organizations, as retaining customers is generally more profitable than attracting them. Existing approaches address the problem considering a dependent variable representing dropout or non-dropout, without considering the dynamic perspetive that the dropout risk changes over time. To solve this problem, we explore the use of random survival forests combined with clusters, in order to evaluate whether the prediction performance improves. The model performance was determined using the concordance probability, Brier Score and the error in the prediction considering 5200 customers of a Health Club. Our results show that the prediction performance in the survival models increased substantially in the models using clusters rather than that without clusters, with a statistically significant difference between the models. The model using a hybrid approach improved the accuracy of the survival model, providing support to develop countermeasures considering the period in which dropout is likely to occur.