Any type of company that offers a service, product, or experience needs a solid understanding of their relationship with their customers; therefore, customer relationship management (CRM) is a key element of modern marketing strategies. One of the biggest challenges that businesses face is the need to understand exactly what causes a customer to buy new products.
In this chapter, we will work on a real-world marketing database provided by the French telecom company, Orange. The task will be to estimate the likelihood of the following customer actions:
- Switch provider (churn)
- Buy new products or services (appetency)
- Buy upgrades or add-ons proposed to them to make the sale more profitable (upselling)
We will tackle the Knowledge Discovery and Data Mining (KDD) Cup 2009 challenge and show the steps to process the data using Weka. First, we will parse and load the data and implement the basic baseline models. Later, we will address advanced modeling techniques, including data preprocessing, attribute selection, model selection, and evaluation.