All industries suffer from voluntary churn -- the loss of customers to some other company. The survival of any business is based on its ability to retain customers. This is particularly true for Telecom companies. Telecom companies today measure voluntary churn by a monthly figure, such as 1.9 percent or 2.1 percent. This is the average number of customers who quit their service per month. Annual churn rates for telecommunications companies average between 10 percent and 67 percent.
Our Exploratory Analysis can help understand what could be the reason for the churning of such customers by feature selection and data analysis.
Data set is provided by Orange S.A. a French telecom MNC for 51 states of the US. The Data set contain 20 features/columns with 3333 observations each representing different customers, along with a churn label specifying whether a customer canceled the subscription.
The main objective is to explore and analyze the data to discover key factors responsible for customer churn and come up with ways/recommendations to ensure customer retention.
- 85.5% percent of the total customers from the data set are loyal and 14.5% of them are in the churners list.
- 35 top states that are contributing to 83% of the churners list
- The churn rate by area code does not differ from the overall.
- Customers with the International Plan tend to churn more frequently.
- Customers with the Voice Mail Plan tend to churn less frequently.
- Customers with four or more customer service calls churn.
Based on the above observations, the following proposals are made that could reduce customer churn:
- Any strategy to alleviate churn must focus more on states having above-average churn.
- Survey all the customers whose call minutes and charges are above average to check for churn intent. Identify root causes for churning and take proper decisions to mitigate those concerns.
- Survey International plan customers to understand the problems and identify root causes for churn. Then take steps to curtail those causes.
- Escalate all calls beyond the 2nd customer call to ensure that any issues that the customer faces are fixed before the next call. Proactively check on customers to confirm that their issue is fixed.