Customer churn analysis among product groups and tariffs in telecommunication sector

Nowadays, firms need to place more emphasis on customer relationship management in order to prevent the customer turnover due to the increasing competition. Especially in telecommunication sector, the fact that customers frequently switch from one subscription or tariff to another depending upon the extension of the product range and the increase in the number of tariffs requires not only better comprehension of customer demand and behaviour but also better strategies in accordance with this demand and behaviour. From this point of view, this study determines the customer churn among the product groups (telephone, telephone + internet, telephone + internet + television) and tariffs; specifies the major factors that cause the churn and also makes some suggestions by analyzing a telecommunication firm?s data. Discrete choice modelling which has not been used in the previous studies in this area is applied as a modelling technique. In the modelling phase, tariff features (tariff fee); demographic characteristics (level of income, household number, dwelling type) and usage information (call duration, download amount) of customers are used as variables.As a result, level of income and dwelling type of customers; household number and monthly call duration; level of income and monthly download amount; and solely level of income are foreseen as more significant variables in churn among the product groups, telephone tariffs, internet tariffs and television tariffs respectively. According to the choice probabilities, it can be also argued that customers have made the most reasonable selection in the internet tariffs in which are considered that churn rate is minimum (persisting rate in current tariff is maximum).