Philosophiae Doctor - PhD / Subscription-based industries have seen a massive expansion in recent decades. In this type of industry the customer has to subscribe to be able to enjoy the service; there-fore, well-de ned start and end points of the customer relationship with the service provider are known. The length of this relationship, that is the time from subscription to service cancellation, is de ned as customer survival time. Unlike transaction-based businesses, where the emphasis is on the quality of a product and customer acquisition, subscription-based businesses focus on the customer and customer retention. A customer focus requires a new approach: managing according to customer equity (the value of a rm's customers) rather than brand equity (the value of a rm's brands). The concept of customer equity is attractive and straightforward, but the implementation and management of the customer equity approach do present some challenges. Amongst these challenges is that customer asset metric - customer lifetime value (the present value of all future pro ts generated from a customer) - depends upon assumptions about the expected survival time of the customer (Bell et al., 2002; Gupta and Lehmann, 2003). In addition, managing and valuing customers as an asset require extensive data and complex modelling. The aim of this study is to illustrate, adapt and develop methods of survival analysis in analysing and estimating customer survival time in subscription-based businesses. Two particular objectives are studied. The fi rst objective is to rede ne the existing survival analysis techniques in business terms and to discuss their uses in order to understand various issues related to the customer-fi rm relationship. The lesson to be learnt here is the ability of survival analysis techniques to extract important information on customers with regard to their loyalties, risk of cancellation of the service, and lifetime value. The ultimate outcome of this process of studying customer survival time will be to understand the dynamics and behaviour of customers with respect to their risk of cancellation, survival probability and lifetime value. The results of the estimates of customer mean survival time obtained from different nonparametric and parametric approaches; namely, the Kaplan-Meier method as well as exponential, Weibull and gamma regression models were found to vary greatly showing the importance of the assumption imposed on the distribution of the survival time. The second objective is to extrapolate the customer survival curve beyond the empirical distribution. The practical motivation for extrapolating the survival curve beyond the empirical distribution originates from two issues; that of calculating survival probabilities (retention rate) beyond the empirical data and of calculating the conditional survival probability and conditional mean survival time at a speci c point in time and for a speci c time window in the future. The survival probabilties are the main components needed to calculate customer lifetime value and thereafter customer equity. In this regard, we propose a survivor function that can be used to extrapolate the survival probabilities beyond the last observed failure time; the estimation of parameters of the newly proposed extrapolation function is based completely on the Kaplan-Meier estimate of the survival probabilities. The proposed function has shown a good mathematical accuracy. Furthermore, the standard error of the estimate of the extrapolation survival function has been derived. The function is ready to be used by business managers where the objective is to enhance customer retention and to emphasise a customer-centric approach. The extrapolation function can be applied and used beyond the customer survival time data to cover clinical trial applications. In general the survival analysis techniques were found to be valuable in understanding and managing a customer- rm relationship; yet, much still needs to be done in this area of research to make these techniques that are traditionally used in medical studies more useful and applicable in business settings. / South Africa

This project was carried out for a company named Attollo, a consulting firm specialized in Business Intelligence and Corporate Performance Management. The project aims to explore a new area for Attollo, predictive analytics, which is then applied to Klarna, a client of Attollo. Attollo has a partnership with IBM, which sells services for predictive analytics. The tool that this project is carried out with, is a software from IBM: SPSS Modeler. Five different examples are given of what and how the predictive work that was carried out at Klarna consisted of. From these examples, the different predictive models' functionality are described. The result of this project demonstrates, by using predictive analytics, how predictive models can be created. The conclusion is that predictive analytics enables companies to understand their customers better and hence make better decisions. / Detta projekt har utforts tillsammans med ett foretag som heter Attollo, en konsultfirma som ar specialiserade inom Business Intelligence & Coporate Performance Management. Projektet grundar sig pa att Attollo ville utforska ett nytt omrade, prediktiv analys, som sedan applicerades pa Klarna, en kund till Attollo. Attollo har ett partnerskap med IBM, som saljer tjanster for prediktiv analys. Verktyget som detta projekt utforts med, ar en mjukvara fran IBM: SPSS Modeler. Fem olika exempel beskriver det prediktiva arbetet som utfordes vid Klarna. Fran dessa exempel beskrivs ocksa de olika prediktiva modellernas funktionalitet. Resultatet av detta projekt visar hur man genom prediktiv analys kan skapa prediktiva modeller. Slutsatsen ar att prediktiv analys ger foretag storre mojlighet att forsta sina kunder och darav kunna gora battre beslut.

Customer churn is a critical problem faced by telecom companies, leading to lost revenue and increased marketing costs. In the highly competitive telecommunication sector, customer retention is essential for success. It costs five to seven times more toacquire a new customer than it does to retain an existing one. Considering this, churnprediction models are increasingly becoming an important tool for telecommunicationorganizations looking to minimize their customer attrition rate. Churn, or customer attrition, is a major problem for businesses in the telecommunications sector. Every year,millions of customers switch to new service providers, resulting in billions of dollarsin lost revenue. In the ever- evolving and highly competitive world of telecommunications, businesses are constantly looking for new ways to improve customer loyaltyand reduce customer churn. Machine learning techniques can be incredibly useful inthis endeavor. This study proposes a customer churn prediction model using machinelearning techniques to help telecom companies retain customers and reduce churn rates.The proposed model analyzes big data using machine learning algorithms, including KNearest Neighbors (KNN), Support Vector Machine (SVM), Logistic Regression (LR),Random Forest (RF), Adaboost, Light Gradient Boosting Machine (LGBM), GradientBoosting, and Extreme Gradient Boosting (XGBoost) to predict customer churn. The proposed model achieves high accuracy score of 95.74% with the XGBoost and LGBMclassifier. The results demonstrate that machine learning algorithms have the potentialto predict customer churn effectively and provide insights into the primary drivers ofcustomer churn.

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Customer churn is problematic for any business trying to expand their customer base. The acquisition of new customers to replace churned ones are associated with additional costs, whereas taking measures to retain existing customers may prove more cost efficient. As such, it is of interest to estimate the time until the occurrence of a potential churn for every customer in order to take preventive measures. The application of deep learning and machine learning to this type of problem using time series data is relatively new and there is a lot of recent research on this topic. This thesis is based on the assumption that early signs of churn can be detected by the temporal changes in customer behavior. Recurrent neural networks and more specifically long short-term memory (LSTM) and gated recurrent unit (GRU) are suitable contenders since they are designed to take the sequential time aspect of the data into account. Random forest (RF) and stochastic vector machine (SVM) are machine learning models that are frequently used in related research. The problem is solved through a classification approach, and a comparison is done with implementations using LSTM, GRU, RF, and SVM. According to the results, LSTM and GRU perform similarly while being slightly better than RF and SVM in the task of predicting customers that will churn in the coming six months, and that all models could potentially lead to cost savings according to simulations (using non-official but reasonable costs assigned to each prediction outcome). Predicting the time until churn is a more difficult problem and none of the models can give reliable estimates, but all models are significantly better than random predictions. / Kundbortfall är problematiskt för företag som försöker expandera sin kundbas. Förvärvandet av nya kunder för att ersätta förlorade kunder är associerat med extra kostnader, medan vidtagandet av åtgärder för att behålla kunder kan visa sig mer lönsamt. Som så är det av intresse att för varje kund ha pålitliga tidsestimat till en potentiell uppsägning kan tänkas inträffa så att förebyggande åtgärder kan vidtas. Applicerandet av djupinlärning och maskininlärning på denna typ av problem som involverar tidsseriedata är relativt nytt och det finns mycket ny forskning kring ämnet. Denna uppsats är baserad på antagandet att tidiga tecken på kundbortfall kan upptäckas genom kunders användarmönster över tid. Reccurent neural networks och mer specifikt long short-term memory (LSTM) och gated recurrent unit (GRU) är lämpliga modellval eftersom de är designade att ta hänsyn till den sekventiella tidsaspekten i tidsseriedata. Random forest (RF) och stochastic vector machine (SVM) är maskininlärningsmodeller som ofta används i relaterad forskning. Problemet löses genom en klassificeringsapproach, och en jämförelse utförs med implementationer av LSTM, GRU, RF och SVM. Resultaten visar att LSTM och GRU presterar likvärdigt samtidigt som de presterar bättre än RF och SVM på problemet om att förutspå kunder som kommer att säga upp sig inom det kommande halvåret, och att samtliga modeller potentiellt kan leda till kostnadsbesparingar enligt simuleringar (som använder icke-officiella men rimliga kostnader associerat till varje utfall). Att förutspå tid till en kunduppsägning är ett svårare problem och ingen av de framtagna modellerna kan ge pålitliga tidsestimat, men alla är signifikant bättre än slumpvisa gissningar.

Churn prediction is a critical task for businesses to retain their valuable customers. This paper presents a comprehensive study of churn prediction in the telecom sector using 15 approaches, including popular algorithms such as Logistic Regression, Support Vector Machine, Decision Tree, Random Forest, and AdaBoost. The study is segmented into three sets of experiments, each focusing on a different approach to building the churn prediction model. The model is constructed using the original training set in the first set of experiments. The second set involves oversampling the training set to address the issue of imbalanced data. Lastly, the third set combines oversampling with recursive feature selection to enhance the model's performance further. The results demonstrate that the Adaptive Boost classifier, implemented with oversampling and recursive feature selection, outperforms the other 14 techniques. It achieves the highest rank in all three evaluation metrics: recall (0.841), f1-score (0.655), and roc_auc (0.793), further indicating that the proposed approach effectively predicts churn and provides valuable insights into customer behavior.

Churn prediction methods are widely used in Customer Relationship Management and have proven to be valuable for retaining customers. To obtain a high predictive performance, recent studies rely on increasingly complex machine learning methods, such as ensemble or hybrid models. However, the more complex a model is, the more difficult it becomes to understand how decisions are actually made. Previous studies on machine learning interpretability have used a global perspective for understanding black-box models. This study explores the use of local explanation models for explaining the individual predictions of a Random Forest ensemble model. The churn prediction was studied on the users of Tink – a finance app. This thesis aims to take local explanations one step further by making comparisons between churn indicators of different user groups. Three sets of groups were created based on differences in three user features. The importance scores of all globally found churn indicators were then computed for each group with the help of local explanation models. The results showed that the groups did not have any significant differences regarding the globally most important churn indicators. Instead, differences were found for globally less important churn indicators, concerning the type of information that users stored in the app. In addition to comparing churn indicators between user groups, the result of this study was a well-performing Random Forest ensemble model with the ability of explaining the reason behind churn predictions for individual users. The model proved to be significantly better than a number of simpler models, with an average AUC of 0.93. / Metoder för att prediktera utträde är vanliga inom Customer Relationship Management och har visat sig vara värdefulla när det kommer till att behålla kunder. För att kunna prediktera utträde med så hög säkerhet som möjligt har den senasteforskningen fokuserat på alltmer komplexa maskininlärningsmodeller, såsom ensembler och hybridmodeller. En konsekvens av att ha alltmer komplexa modellerär dock att det blir svårare och svårare att förstå hur en viss modell har kommitfram till ett visst beslut. Tidigare studier inom maskininlärningsinterpretering har haft ett globalt perspektiv för att förklara svårförståeliga modeller. Denna studieutforskar lokala förklaringsmodeller för att förklara individuella beslut av en ensemblemodell känd som 'Random Forest'. Prediktionen av utträde studeras påanvändarna av Tink – en finansapp. Syftet med denna studie är att ta lokala förklaringsmodeller ett steg längre genomatt göra jämförelser av indikatorer för utträde mellan olika användargrupper. Totalt undersöktes tre par av grupper som påvisade skillnader i tre olika variabler. Sedan användes lokala förklaringsmodeller till att beräkna hur viktiga alla globaltfunna indikatorer för utträde var för respektive grupp. Resultaten visade att detinte fanns några signifikanta skillnader mellan grupperna gällande huvudindikatorerna för utträde. Istället visade resultaten skillnader i mindre viktiga indikatorer som hade att göra med den typ av information som lagras av användarna i appen. Förutom att undersöka skillnader i indikatorer för utträde resulterade dennastudie i en välfungerande modell för att prediktera utträde med förmågan attförklara individuella beslut. Random Forest-modellen visade sig vara signifikantbättre än ett antal enklare modeller, med ett AUC-värde på 0.93.

Background: Game analytics is a field that aims to analyze games and help in the enhancement of game development. Data mining is a prominent technique for game analytics. Recent advances in the field of process mining have motivated users to apply process mining to real-world scenarios in order to derive process-oriented insights. In this study, We provide a discussion on how process mining can be used in game analytics. Objective: The goal of this study is to apply process mining to player data from a live game, analyze the results, and determine whether these results can be interpreted, whether we can derive any patterns or insights that can be useful for game designers, and whether process mining can be used in-game analytics and, if so, what kind of versatility it can offer. Also, this study provides approaches on how process mining can be used in player churn prediction and determination of abnormal player activity sequences. Method: Firstly, a literature review is performed to comprehend all of the process mining techniques and metrics used to evaluate the discovered process models. Then experiments are conducted by applying process mining on data from a live game, determine a churn predictor using process mining and determining a technique to identify abnormal player sequences. Results: Process discovery algorithms are applied on data from a live game, the results are analyzed. Several process models are discovered to identify player churn and it is compared with a baseline machine learning churn predictor trained on the same data to that of process mining. Abnormal player activity sequences of the gameare determined using process mining and compared with expected player sequences and analyzed with the help of game designers. Conclusion: Process mining can be utilized in game analytics to discover new process-oriented insights. When compared to typical data mining techniques, the results gained by process mining are more versatile. It also has other capabilities such as detecting unusual sequences in data.

High quality software is a key component of various technology systems that are crucial to software producers, users, and society in general. Software application development today uses software from external sources, to achieve software implementation goals. Numerous methods, activities, and standards have been developed in order to realize quality software. Nevertheless, the pursuit for new methods of realizing and assuring quality in software is incessant. Researchers in the software engineering field are in pursuit of methods that can be on par with changing technology. Assessment of open-source software can be supported by a methodology that uses data from prior releases of a software product to predict the quality of a future release. The proposed methodology is validated using a case study of MPICH ? an open-source software product from the field of high-performance computing. A quantitative model and a module-order model have been developed that can predict the modules that are expected to have code-churn and the amount of code-churn in each module. Code-churn is defined as the amount of update activity that has been done to a software product in order to fix bugs. Further validation of the proposed methodology on other software and development of classification models for the quality factor code-churn are recommended as future work.

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