Churn Prediction & Retention Strategy Summary
Model Performance
- Best Model: Logistic Regression
- AUC: 0.8459
- Accuracy: 0.8059
Key Predictors (by importance)
- Tenure
- OnlineSecurity
- Contract Type
- TotalCharges
Churn Risk Insights
- Predicted Churners: 111 customers
- Monthly Revenue at Risk: $8,835.4
Incentive Scheme Proposal
Strategy: Offer a $100 incentive to 50% of at-risk customers (i.e., ~55 customers)
Estimated Outcome
- Retained Customers: 55.5
- Monthly Revenue Retained: $4,417.7
- Annual Revenue Retained: $53,012.4
- Total Incentive Cost: $5,550
- Net Benefit: $47,462.4
Conclusion
A targeted incentive strategy can retain over 50% of at-risk customers and generate $47.5K in
net annual benefit. This approach is both financially sound and operationally feasible, and is
recommended for immediate implementation to reduce churn.