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Article
Publication date: 1 June 2005

Sezgin Kaya and Bernard Williams

Business changes challenge the predictability of the workplace formation. In the broader sense, business change affects workplaces through forming and re‐forming groups, teams and…

1266

Abstract

Business changes challenge the predictability of the workplace formation. In the broader sense, business change affects workplaces through forming and re‐forming groups, teams and business units, so causing ‘churn’ in workplaces. The aim of this paper is to present research evidence on churn strategies and approaches extracted from the Centre for Facilities Management’s research on five financial organisations based in the City of London, one of the most volatile business environments in the world. The different approaches are analysed systematically to understand the possible impact of churn on business and how to deal with it effectively. In this paper the evidence of the link between business and workplace change is explored, and a background for consensus on churn processes is discussed. The findings and conclusions are then compared with previous studies by Bernard Williams Associates for the practical implications.

Details

Journal of Corporate Real Estate, vol. 7 no. 2
Type: Research Article
ISSN: 1463-001X

Keywords

Article
Publication date: 10 April 2024

Aslıhan Dursun-Cengizci and Meltem Caber

This study aims to predict customer churn in resort hotels by calculating the churn probability of repeat customers for future stays in the same hotel brand.

83

Abstract

Purpose

This study aims to predict customer churn in resort hotels by calculating the churn probability of repeat customers for future stays in the same hotel brand.

Design/methodology/approach

Based on the recency, frequency, monetary (RFM) paradigm, random forest and logistic regression supervised machine learning algorithms were used to predict churn behavior. The model with superior performance was used to detect potential churners and generate a priority matrix.

Findings

The random forest algorithm showed a higher prediction performance with an 80% accuracy rate. The most important variables were RFM-based, followed by hotel sector-specific variables such as market, season, accompaniers and booker. Some managerial strategies were proposed to retain future churners, clustered as “hesitant,” “economy,” “alternative seeker,” and “opportunity chaser” customer groups.

Research limitations/implications

This study contributes to the theoretical understanding of customer behavior in the hospitality industry and provides valuable insight for hotel practitioners by demonstrating the methods that facilitate the identification of potential churners and their characteristics.

Originality/value

Most customer retention studies in hospitality either concentrate on the antecedents of retention or customers’ revisit intentions using traditional methods. Taking a unique place within the literature, this study conducts churn prediction analysis for repeat hotel customers by opening a new area for inquiry in hospitality studies.

Details

International Journal of Contemporary Hospitality Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 14 July 2023

Qin Chen, Jiahua Jin, Tingting Zhang and Xiangbin Yan

The success of online health communities (OHCs) depends on maintaining long-term relationships with physicians and preventing churn. Even so, the reasons for physician churn are…

Abstract

Purpose

The success of online health communities (OHCs) depends on maintaining long-term relationships with physicians and preventing churn. Even so, the reasons for physician churn are poorly understood. In this study, an empirical model was proposed from a social influence perspective to explore the effects of online social influence and offline social influence on physician churn, as well as the moderating effect of their online returns.

Design/methodology/approach

The empirical data of 4,145 physicians from a Chinese OHC, and probit regression models were employed to verify the proposed theoretical model.

Findings

The results suggest that physicians' churn intention is influenced by online and offline social influences, and the offline social influence is more powerful. Physicians' reputational and economic returns could weaken the effect of online social influence on churn intention. However, physicians' economic returns could strengthen the effect of offline social influence on churn intention.

Originality/value

This research study is the first attempt to explore physician churn and divides the social influence into online and offline social influences according to the source of social relationship. The findings contribute to the literature on e-Health, user churn and social influence and provide management implications for OHC managers.

Details

Aslib Journal of Information Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2050-3806

Keywords

Article
Publication date: 12 June 2009

Luisito Bertinelli, Olivier Cardi, Teoman Pamukçu, Eric Strobl and Robert Thornton

The purpose of this paper is to investigate the patterns and determinants of excess labour turnover (churning) in the Luxembourg labour market using a rich employer‐employee…

1593

Abstract

Purpose

The purpose of this paper is to investigate the patterns and determinants of excess labour turnover (churning) in the Luxembourg labour market using a rich employer‐employee matched data set.

Design/methodology/approach

The paper formulates a model to explain churning rates using three sets of explanatory variables: various worker characteristics, establishment characteristics, and two‐digit sector‐specific characteristics. The data used are from the Luxembourg social security system for the period 1992‐2003.

Findings

The findings show that there are high churning levels in Luxembourg, that their determinants vary significantly across sectors, and that much of this variation can be explained by worker‐ and establishment‐specific features.

Research limitations/implications

A major question, still undecided in the research literature, is whether churning is simply the result of random job‐worker mismatches.

Originality/value

There are relatively few prior studies that have examined which employee and employer characteristics are associated with excess worker turnover, and the paper is the first to analyze the phenomenon of churning in the Luxembourg labour market. Luxembourg has recently experienced impressive employment growth (about 3.5 percent annually) since the beginning of the 1990s; and, Luxembourg being a small economy, it was feasible to analyze the entire population of workers and firms.

Details

International Journal of Manpower, vol. 30 no. 3
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 13 March 2017

Samira Khodabandehlou and Mahmoud Zivari Rahman

This paper aims to provide a predictive framework of customer churn through six stages for accurate prediction and preventing customer churn in the field of business.

4533

Abstract

Purpose

This paper aims to provide a predictive framework of customer churn through six stages for accurate prediction and preventing customer churn in the field of business.

Design/methodology/approach

The six stages are as follows: first, collection of customer behavioral data and preparation of the data; second, the formation of derived variables and selection of influential variables, using a method of discriminant analysis; third, selection of training and testing data and reviewing their proportion; fourth, the development of prediction models using simple, bagging and boosting versions of supervised machine learning; fifth, comparison of churn prediction models based on different versions of machine-learning methods and selected variables; and sixth, providing appropriate strategies based on the proposed model.

Findings

According to the results, five variables, the number of items, reception of returned items, the discount, the distribution time and the prize beside the recency, frequency and monetary (RFM) variables (RFMITSDP), were chosen as the best predictor variables. The proposed model with accuracy of 97.92 per cent, in comparison to RFM, had much better performance in churn prediction and among the supervised machine learning methods, artificial neural network (ANN) had the highest accuracy, and decision trees (DT) was the least accurate one. The results show the substantially superiority of boosting versions in prediction compared with simple and bagging models.

Research limitations/implications

The period of the available data was limited to two years. The research data were limited to only one grocery store whereby it may not be applicable to other industries; therefore, generalizing the results to other business centers should be used with caution.

Practical implications

Business owners must try to enforce a clear rule to provide a prize for a certain number of purchased items. Of course, the prize can be something other than the purchased item. Business owners must accept the items returned by the customers for any reasons, and the conditions for accepting returned items and the deadline for accepting the returned items must be clearly communicated to the customers. Store owners must consider a discount for a certain amount of purchase from the store. They have to use an exponential rule to increase the discount when the amount of purchase is increased to encourage customers for more purchase. The managers of large stores must try to quickly deliver the ordered items, and they should use equipped and new transporting vehicles and skilled and friendly workforce for delivering the items. It is recommended that the types of services, the rules for prizes, the discount, the rules for accepting the returned items and the method of distributing the items must be prepared and shown in the store for all the customers to see. The special services and reward rules of the store must be communicated to the customers using new media such as social networks. To predict the customer behaviors based on the data, the future researchers should use the boosting method because it increases efficiency and accuracy of prediction. It is recommended that for predicting the customer behaviors, particularly their churning status, the ANN method be used. To extract and select the important and effective variables influencing customer behaviors, the discriminant analysis method can be used which is a very accurate and powerful method for predicting the classes of the customers.

Originality/value

The current study tries to fill this gap by considering five basic and important variables besides RFM in stores, i.e. prize, discount, accepting returns, delay in distribution and the number of items, so that the business owners can understand the role services such as prizes, discount, distribution and accepting returns play in retraining the customers and preventing them from churning. Another innovation of the current study is the comparison of machine-learning methods with their boosting and bagging versions, especially considering the fact that previous studies do not consider the bagging method. The other reason for the study is the conflicting results regarding the superiority of machine-learning methods in a more accurate prediction of customer behaviors, including churning. For example, some studies introduce ANN (Huang et al., 2010; Hung and Wang, 2004; Keramati et al., 2014; Runge et al., 2014), some introduce support vector machine ( Guo-en and Wei-dong, 2008; Vafeiadis et al., 2015; Yu et al., 2011) and some introduce DT (Freund and Schapire, 1996; Qureshi et al., 2013; Umayaparvathi and Iyakutti, 2012) as the best predictor, confusing the users of the results of these studies regarding the best prediction method. The current study identifies the best prediction method specifically in the field of store businesses for researchers and the owners. Moreover, another innovation of the current study is using discriminant analysis for selecting and filtering variables which are important and effective in predicting churners and non-churners, which is not used in previous studies. Therefore, the current study is unique considering the used variables, the method of comparing their accuracy and the method of selecting effective variables.

Details

Journal of Systems and Information Technology, vol. 19 no. 1/2
Type: Research Article
ISSN: 1328-7265

Keywords

Article
Publication date: 27 August 2014

Yuangen Lai and Jianxun Zeng

The purpose of this paper is to discuss issues related to customer churn behavior in digital libraries (DLs) and demonstrate the successful application of Survival Analysis for…

1457

Abstract

Purpose

The purpose of this paper is to discuss issues related to customer churn behavior in digital libraries (DLs) and demonstrate the successful application of Survival Analysis for understanding customer churn status and relationship duration distribution between customers and libraries.

Design/methodology/approach

The study applies non-parametric methods of Survival Analysis to analyze churn behaviors of 8,054 customers from a famous Chinese digital library, and a cluster method to make customer segmentation according to customer behavioral features.

Findings

The customer churn rate of the given library is very high, so as to the churn hazard in early three months after customer's registration on the web site of the library. There is clear difference in both customer survival time and churn hazard among customer groups. It is necessary to strengthen customer churn analysis and customer relationship management (CRM) for DLs.

Research limitations/implications

The studied samples are mainly based on customers from one digital library and some hypotheses have not been strictly proven due to the absence of relevant empirical researches.

Practical implications

This study provides a reasonable basis for decision making about CRM in DLs.

Originality/value

Most previous researches about information behavior concentrate on information seeking behavior in DLs, seldom discuss customer switching behavior. The paper discusses issues related to customer churn analysis and illustrates the adaptation of Survival Analysis to understand customer churn status and relationship duration distribution in DLs.

Details

Program, vol. 48 no. 4
Type: Research Article
ISSN: 0033-0337

Keywords

Article
Publication date: 8 April 2014

Kristof Coussement

Retailers realize that customer churn detection is a critical success factor. However, no research study has taken into consideration that misclassifying a customer as a…

3455

Abstract

Purpose

Retailers realize that customer churn detection is a critical success factor. However, no research study has taken into consideration that misclassifying a customer as a non-churner (i.e. predicting that (s)he will not leave the company, while in reality (s)he does) results in higher costs than predicting that a staying customer will churn. The aim of this paper is to examine the prediction performance of various cost-sensitive methodologies (direct minimum expected cost (DMECC), metacost, thresholding and weighting) that incorporate these different costs of misclassifying customers in predicting churn.

Design/methodology/approach

Cost-sensitive methodologies are benchmarked on six real-life churn datasets from the retail industry.

Findings

This article argues that total misclassification cost, as a churn prediction evaluation measure, is crucial as input for optimizing consumer decision making. The practical classification threshold of 0.5 for churn probabilities (i.e. when the churn probability is greater than 0.5, the customer is predicted as a churner, and otherwise as a non-churner) offers the worst performance. The provided managerial guidelines suggest when to use each cost-sensitive method, depending on churn levels and the cost level discrepancy between misclassifying churners versus non-churners.

Practical implications

This research emphasizes the importance of cost-sensitive learning to improve customer retention management in the retail context.

Originality/value

This article is the first to use the concept of misclassification costs in a churn prediction setting, and to offer recommendations about the circumstances in which marketing managers should use specific cost-sensitive methodologies.

Details

European Journal of Marketing, vol. 48 no. 3/4
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 4 June 2010

Steffen Zorn, Wade Jarvis and Steve Bellman

As acquiring new customers is costly, putting effort into satisfying and keeping customers over the long term can improve profitability. Firms usually do not know how each…

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Abstract

Purpose

As acquiring new customers is costly, putting effort into satisfying and keeping customers over the long term can improve profitability. Firms usually do not know how each individual customer is feeling at any time (their attitude to the firm), so typically a customer's likelihood of leaving (“churning”) is predicted from behavioural data. The purpose of this paper is to investigate how a firm can add attitudinal variables to these churning models by deriving proxy indicators of satisfaction and commitment from behavioural data. The paper tests whether adding these proxies improved predictions of churning compared to a typical model based on purchasing behaviour (PB).

Design/methodology/approach

Analysing data from 6,000 regular customers from an Australian digital versatile disc rental company, logistic regression predicted membership termination (i.e. churning=1) versus continuation (=0). A baseline model used three traditional behavioural variables directly linked to members' PB. A second model including proxies for satisfaction and commitment from the customer database was compared against the baseline model to investigate improvement in churn prediction.

Findings

The most significant predictor of churn is an indicator of commitment: the uncertainty of a customer's commitment, indicated by number of times they changed their subscription plan.

Practical implications

The more customers change their plan, the more likely they are to quit the relationship with the firm, most likely because they are uncertain about how they can benefit from a long‐term commitment to the firm. Monitoring uncertainty indicators, such as plan changing, allows firms to intervene with special offers for uncertain customers, and, therefore, increase the likelihood of them staying with the firm.

Originality/value

The paper discusses the use of customer behaviour recorded in databases to identify proxy indicators of attitude before this attitude translates into churning behaviour.

Details

Journal of Research in Interactive Marketing, vol. 4 no. 2
Type: Research Article
ISSN: 2040-7122

Keywords

Open Access
Article
Publication date: 26 May 2022

James Lappeman, Michaela Franco, Victoria Warner and Lara Sierra-Rubia

This study aims to investigate the factors that influence South African customers to potentially switch from one bank to another. Instead of using established models and survey…

2635

Abstract

Purpose

This study aims to investigate the factors that influence South African customers to potentially switch from one bank to another. Instead of using established models and survey techniques, the research measured social media sentiment to measure threats to switch.

Design/methodology/approach

The research involved a 12-month analysis of social media sentiment, specifically customer threats to switch banks (churn). These threats were then analysed for co-occurring themes to provide data on the reasons customers were making these threats. The study used over 1.7 million social media posts and focused on all five major South African retail banks (essentially the entire sector).

Findings

This study concluded that seven factors are most significant in understanding the underlying causes of churn. These are turnaround time, accusations of unethical behaviour, billing or payments, telephonic interactions, branches or stores, fraud or scams and unresponsiveness.

Originality/value

This study is unique in its measurement of unsolicited social media sentiment as opposed to most churn-related research that uses survey- or customer-data-based methods. In addition, this study observed the sentiment of customers from all major retail banks across 12 months. To date, no studies on retail bank churn theory have provided such an extensive perspective. The findings contribute to Susan Keaveney’s churn theory and provide a new measurement of switching threat through social media sentiment analysis.

Details

Journal of Consumer Marketing, vol. 39 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 16 March 2012

M. Geetha and Jensolin Abitha Kumari

The purpose of this paper is to provide a detailed analysis of the usage pattern of non‐revenue earning customers (NREC) who cause revenue churn in the company and are susceptible…

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Abstract

Purpose

The purpose of this paper is to provide a detailed analysis of the usage pattern of non‐revenue earning customers (NREC) who cause revenue churn in the company and are susceptible to churn in the near future. These NREC customers were analyzed to discern a pattern in their usage and to serve as proactive measure to prevent customer churn.

Design/methodology/approach

Data from a leading telecom service provider were analyzed. The company has around seven lakh consumer mobile users. Within the seven lakhs consumer mobile users around two lakh customers are active users, i.e. revenue earning customers. This group of active customers also consists of around 37,388 customers who move to dormant state (from revenue earning to non‐revenue earning) every month. These customers were analyzed to understand their susceptibility to churn.

Findings

Analysis of revenue dump data indicates consumers with overall usage revenue per minute greater than 75 paise (USD 0.01) and those with greater usage of value added services are susceptible to churn. Also based on the nature of calls, churn occurs with the subscribers making more calls to other networks rather than to the same network.

Research limitations/implications

In a fiercely competitive market, service providers constantly focus on customer retention. The study has high importance as it helps to find out the customers who are likely to churn. This would help telecom companies create proactive rather than reactive strategies toward customer churn.

Originality/value

Earlier studies identified the reasons for customer churn and attributed the same to it. The authors propose that prior to customer churn there is a distinct shift in his/her usage pattern with the current service provider and this behavior is termed revenue churn. This revenue churn ultimately leads to customer churn from the network. This revenue churn is not explored much in detail in the literature.

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