An empirical evaluation of rotation-based ensemble classifiers for customer churn prediction
Koen De Bock () and
Dirk Van den Poel ()
Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration
Several studies have demonstrated the superior performance of ensemble classification algorithms, whereby multiple member classifiers are combined into one aggregated and powerful classification model, over single models. In this paper, two rotation-based ensemble classifiers are proposed as modeling techniques for customer churn prediction. In Rotation Forests, feature extraction is applied to feature subsets in order to rotate the input data for training base classifiers, while RotBoost combines Rotation Forest with AdaBoost. In an experimental validation based on data sets from four real-life customer churn prediction projects, Rotation Forest and RotBoost are compared to a set of well-known benchmark classifiers. Moreover, variations of Rotation Forest and RotBoost are compared, implementing three alternative feature extraction algorithms: Principal Component Analysis (PCA), Independent Component Analysis (ICA) and Sparse Random Projections (SRP). The performance of rotation-based ensemble classifier is found to depend upon (i) the performance criterion used to measure classification performance, and (ii) the implemented feature extraction algorithm. In terms of accuracy, RotBoost outperforms Rotation Forest, but none of the considered variations offers a clear advantage over the benchmark algorithms. However, in terms of AUC and top-decile lift, results clearly demonstrate the competitive performance of Rotation Forests compared to the benchmark algorithms. Moreover, ICA3 based Rotation Forests outperform all other considered classifiers and are therefore recommended as a well-suited alternative classification technique for the prediction of customer churn that allows for improved marketing decision making.
Keywords: CRM; database marketing; customer churn prediction; ensemble classification; rotation-based ensemble classifiers; RotBoost; Rotation Forest; ICA; AUC; lift (search for similar items in EconPapers)
Pages: 30 pages
New Economics Papers: this item is included in nep-cmp
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Working Paper: An empirical evaluation of rotation-based ensemble classifiers for customer churn prediction (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:11/717
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