Echo State Network with SVM-readout for customer churn prediction

Abstract

In all customer based industries, customer churn is considered as one of the most important and challenging concerns since it can lead to a serious profit loss. Therefore, developing accurate churn prediction models can significantly help Customer Relationship Management in planning effective retention campaigns and consequently helps in maximizing the profit of the service provider. In this paper, we propose the use of an Echo State Network (ESN) with a Support Vector Machine (SVM) training algorithm for predicting customer churn in telecommunication companies. The proposed approach is trained and tested based on two datasets: the first is a popular online available dataset while the second is obtained from a local service provider. Experiment results show that ESN with SVM readout outperform other popular machine learning models used in the literature for the same customer churn prediction problems.