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The telecommunications company is facing a 26.54% churn rate, resulting in a significant revenue loss of $2.86 million. The project analyzes 7,043 customer records to identify high-risk segments and develop targeted retention strategies, focusing on month-to-month customers and electronic check users. Recommendations include contract migration, payment method optimization, and enhancing service quality to reduce churn and improve customer lifetime value.
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0% found this document useful (0 votes)
11 views6 pages

Updated Project Content

The telecommunications company is facing a 26.54% churn rate, resulting in a significant revenue loss of $2.86 million. The project analyzes 7,043 customer records to identify high-risk segments and develop targeted retention strategies, focusing on month-to-month customers and electronic check users. Recommendations include contract migration, payment method optimization, and enhancing service quality to reduce churn and improve customer lifetime value.
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Telecom Customer Retention: Data-Driven

Analysis Project
PROBLEM STATEMENT

This telecommunications company faces a significant customer retention challenge with


1,869 customers churning out of 7,043 total customers, representing a 26.54%
churn rate. The financial impact is substantial, with $2,862,927 in revenue loss from
churned customers, representing 17.8% of the company's total revenue base of $16.1
million.

Key Business Challenges:

 High churn rate among month-to-month customers (42.7%)

 Revenue leakage from electronic check payment users (45.3% churn)

 Service quality issues with fiber optic customers (41.9% churn)

 Critical retention issues with new customers (47.7% churn in first 12 months)

PROJECT DESCRIPTION

This project analyzes a comprehensive dataset of 7,043 customer records with 21 key
attributes including customer demographics, service usage, contract details, and
payment information. The dataset spans customers with tenure ranging from 0 to 72
months, with monthly charges from $18.25 to $118.75.

Analytical Approach:

 Data Scope: Complete customer portfolio analysis across multiple dimensions

 Statistical Methods: Churn rate analysis by customer segments and risk factors

 Revenue Impact Assessment: Financial modeling of churn consequences

 Predictive Insights: Identification of high-risk customer segments

Key Dataset Characteristics:

 Customer tenure: Average 32.4 months, ranging 0-72 months

 Revenue range: $18.25-$118.75 monthly charges


 Service distribution: 44% fiber optic, 34.4% DSL, 21.7% no internet

 Contract mix: 55% month-to-month, 24.1% two-year, 20.9% one-year

WHO ARE THE END USERS?

Customer Success Teams

 Primary Focus: 3,875 month-to-month customers with 42.7% churn risk

 Immediate Action: 1,869 customers who have already churned require win-back
strategies

 Retention Campaigns: Target 2,175 customers with ≤12 months tenure (47.7%
churn risk)

Revenue Operations Teams

 Portfolio Protection: Secure $16.1 million total revenue base from further 26.5%
annual churn

 Loss Recovery: Address $2.86 million in identified revenue losses

 Risk Mitigation: Focus on $12.4 million monthly revenue from high-risk segments

Marketing Teams

 Acquisition Strategy: Improve onboarding for 2,175 new customers (≤12 months
tenure)

 Retention Campaigns: Target 2,365 electronic check users with 45.3% churn rate

 Contract Optimization: Convert 3,875 month-to-month customers to longer terms

Product Teams

 Service Quality: Address 41.9% churn rate among 3,096 fiber optic customers

 Payment Experience: Optimize systems for 2,365 electronic check users

 Feature Development: Enhance services based on churn factor analysis

Executive Leadership

 Strategic Planning: Address 26.5% company-wide churn rate impact


 Investment Decisions: Allocate resources based on $2.86M revenue loss analysis

 Performance Monitoring: Track improvements against current baseline metrics

TECHNOLOGY USED

Data Processing & Analytics

 Python/Pandas: Processing 7,043 customer records with 21 attributes

 Statistical Analysis: Churn analysis across 3 contract types and 4 payment


methods

 Revenue Analytics: $16.1 million portfolio analysis and impact modeling

 Segmentation: Customer clustering based on tenure, service type, and payment


behavior

Machine Learning Framework

 Feature Engineering: 19 customer attributes (excluding customerID and target


variable)

 Classification Models: Predictive modeling for churn probability assessment

 Risk Scoring: Customer-level churn risk calculation and ranking

 Performance Metrics: Model validation using precision, recall, and ROC analysis

Business Intelligence Tools

 Dashboard Development: Interactive visualizations for stakeholder reporting

 KPI Tracking: Real-time monitoring of churn rates and revenue impact

 Automated Reporting: Scheduled analysis of customer behavior patterns

 Integration: CRM and billing system data consolidation

Deployment Infrastructure

 Cloud Platform: Scalable processing for real-time churn prediction

 API Development: Integration endpoints for operational systems

 Monitoring: System performance and model accuracy tracking

 Version Control: Model management and deployment pipelines


RESULTS

Dataset Analysis Achievements

 Comprehensive Analysis: 7,043 customers analyzed across 21 behavioral and


demographic dimensions

 Churn Rate Discovery: 26.54% overall churn with significant segment variations
identified

 Revenue Impact Quantification: $2,862,927 revenue loss documented (17.8% of


total revenue)

 Risk Segmentation: High-risk customer groups identified and prioritized

Key Risk Factors Identified

Contract Type Impact

 Month-to-month: 42.7% churn rate (3,875 customers)

 One-year contracts: 11.3% churn rate (1,473 customers)

 Two-year contracts: 2.8% churn rate (1,695 customers)

 Recommendation: Contract migration could reduce churn by 1,217 customers

Payment Method Analysis

 Electronic check: 45.3% churn rate (2,365 customers) - Highest risk

 Mailed check: 19.1% churn rate (1,612 customers)

 Bank transfer: 16.7% churn rate (1,544 customers)

 Credit card: 15.2% churn rate (1,522 customers) - Most stable

Service Type Performance

 Fiber optic: 41.9% churn rate (3,096 customers) - Quality concerns

 DSL: 19.0% churn rate (2,421 customers) - Stable performance

 No internet: 7.4% churn rate (1,526 customers) - Lowest risk

Tenure-Based Insights
 0-12 months: 47.7% churn rate (2,175 customers) - Critical onboarding period

 13-24 months: 28.7% churn rate (1,024 customers)

 25-48 months: 20.4% churn rate (1,594 customers)

 49-72 months: 9.5% churn rate (2,239 customers) - Most loyal segment

Business Impact Metrics

 High-risk customer segment: 1,303 customers in month-to-month + electronic


check category

 Average customer value: $2,280 lifetime value (potential loss per churn)

 Monthly revenue at risk: $250,858 from month-to-month customer base

 Recovery opportunity: 1,869 churned customers represent $2.86M recovery


potential

Actionable Recommendations

Immediate Actions (0-30 days)

1. Contract Migration Program: Target 3,875 month-to-month customers for


contract upgrades

2. Payment Method Optimization: Incentivize 2,365 electronic check users to


switch payment methods

3. New Customer Onboarding: Enhanced support for 2,175 customers with ≤12
months tenure

Strategic Initiatives (30-90 days)

1. Fiber Optic Service Quality: Address technical issues affecting 3,096 customers
(41.9% churn)

2. Loyalty Programs: Develop retention offers for high-value customer segments

3. Predictive Analytics: Implement real-time churn scoring for proactive intervention

Long-term Impact (90+ days)

1. Revenue Protection: Potential to reduce annual revenue loss from $2.86M to


$1.4M
2. Churn Rate Improvement: Target reduction from 26.5% to 15% through focused
interventions

3. Customer Lifetime Value: Increase average customer value through retention


improvements

ROI Projections

 Potential Revenue Recovery: $1.4M annually through targeted retention


programs

 Cost Avoidance: $2.86M in prevented future churn through early intervention

 Customer Acquisition Savings: Reduced need for new customer acquisition (5-7x
cost difference)

This data-driven analysis provides a comprehensive foundation for implementing


targeted customer retention strategies based on actual customer behavior patterns and
documented business impact.

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