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Teltek Project Submission

This document contains the responses to 11 questions asked as part of a project submission for TelTek. Key details include: 1) The RFM scores for customers 26 and 150. 2) Matching targeting strategies to different RFM score clusters, identifying the most valuable cluster as cluster 4. 3) Choosing the decision tree model as the best approach for predicting customer churn based on its performance metrics. 4) Identifying contract bucket, billing method, and tenure as significant factors influencing customer churn. 5) Naming print and search as significant channels influencing total unit sales. 6) Providing the regression coefficients and equation relating total unit sales to different marketing channels.

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189 views14 pages

Teltek Project Submission

This document contains the responses to 11 questions asked as part of a project submission for TelTek. Key details include: 1) The RFM scores for customers 26 and 150. 2) Matching targeting strategies to different RFM score clusters, identifying the most valuable cluster as cluster 4. 3) Choosing the decision tree model as the best approach for predicting customer churn based on its performance metrics. 4) Identifying contract bucket, billing method, and tenure as significant factors influencing customer churn. 5) Naming print and search as significant channels influencing total unit sales. 6) Providing the regression coefficients and equation relating total unit sales to different marketing channels.

Uploaded by

mona
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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TelTek Project Submission

Name - Monalisa Mallick


Student ID - 4474677
Q-1) What is the RFM score of customer 26 and customer 150.

For Customer 26: For Customer 150:

Recency (R) score: 1 Recency (R) score: 2

Frequency (F) score : 1 Frequency (F) score : 2

Monetary value (M) score: 4 Monetary value (M) score: 3


Q-2) Match the targeting strategies with the RFM scores given in the table.
RFM scores Targeting strategy
A. Customers with all the recency, frequency and monetary value i. TelTek should send them notifications about new TV shows
scores of 3 and 4 such as 4-4-4,4-4-3,3-4-3 being screened on its OTT service partner’s platform. In this way,
the firm can make the customers consume more data, eventually
pushing them to recharge more frequently.

B. Churned best customers with low recency scores and high ii. TelTek should ensure that these type of customers have a
frequency and monetary scores such as 1-4-4, 1-3-4, 1-3-3 great experience. Any Conflict or complaint should be resolved
promptly.

C. Customers with low-frequency scores and high recency and iii. The firm should use upselling strategy to make these
monetary value scores such as 4-1-4, 3-1-4, 3-1-3 customers upgrade their existing subscription or subscribe for
additional services.

D. Customers with low monetary value score and high recency iv. The company should develop a strategy to reacquire and re-
and frequency scores such as 4-4-1, 3-4-1,3-3-1 engage these type of customers by offering them incentives and
great customer experience

A - _ii__ , B - ___iv_ , C - __i__ , D - _iii_


Q-3) Which cluster comprises of the most valuable customers? What targeting
strategy should the company use for these type of customers?.

Cluster: 4
Targeting strategy:

1. Offer them exclusive discounts


2. Promotional offers on bundled value added services
3. Exclusive offers and discounts to upgrade to new launched services
4. Dedicated and priority 24/7 customer support
Q-4) Study each metric of cluster 2 and cluster 3. Which cluster is the best
among the two? What can you do to the other cluster to become the best
among the cluster 2 and 3?

Cluster: 3 They have high ARPU, less complaints and are on postpaid services.

Targeting strategy to make cluster 2 the best:

- Cluster 2 customers have prepaid plans. The company can offer them promotional offer
and added benefits on postpaid plans. The USPs like increased convenience, better
service quality, and additional features can be promoted.
- The no. of complaints can be handled on priority.
- Bundle offers can be given with postpaid plan and handset combo.
Q-5) How would you approach cluster 3 to make them more profitable?

Targeting strategy:

Discounts & Deals: Teltek can offer discounts on services or products to customers
who upgrade or subscribe as their contract is going to expire in 2 months.

Value Added Services: Give promotional offers with additional benefits on bundled
packages. TV packages can be given with an good offer and benefits like exclusive
content access to new movies and TV shows.
Q-6) Which metrics will you use in selecting the best classification model?

Metric:
Accuracy: Accuracy measures the percentage of correct predictions made by the
model.
Error Rate or Misclassification Rate: The error rate or misclassification rate measures
the percentage of incorrect predictions made by the model.
Specificity: Specificity measures the percentage of correctly predicted negative
instances (Y = 0) out of all actual negative instances.
Sensitivity: Sensitivity measures the percentage of correctly predicted positive
instances (Y = 1) out of all actual positive instances.
Q-7) In order to predict the customer churn, the firm is required to solve a binary classification problem. Apart from
logistic regression that you have already seen, there are other models as discussed in the video. Based on the
confusion matrix (given on the platform) for each of these models, choose the best method for building the
propensity to churn model?

Classification model:
Logistic regression
Accuracy= 0.65
Error Rate= 0.35
Specificity= 0.71
Sensitivity= 0.60

Random forest
Accuracy= 0.72
Error Rate= 0.27
Specificity= 0.80
Sensitivity= 0.65
Q-7) In order to predict the customer churn, the firm is required to solve a binary classification problem. Apart from
logistic regression that you have already seen, there are other models as discussed in the video. Based on the
confusion matrix (given on the platform) for each of these models, choose the best method for building the
propensity to churn model?

Classification model:

Decision tree
Accuracy= 0.8
Error Rate= 0.24
Specificity= 0.84
Sensitivity= 0.71

Among the three models, the "Decision Tree model" demonstrates the highest accuracy,
sensitivity and specificity with lowest error rate. This suggests that the Decision Tree model
could be the most suitable approach for constructing the propensity to churn model in this
particular scenario.
Q-8) From the churn analysis, which factors have a significant influence on
customer churn at a 95% confidence level?

Significant factors:

These factors have p value less than 0.05, so are significant


- Contract bucket (p-value = 0.0001)
- Customer billing (paperless or not) (p-value = 0.005)
- Tenure group (p-value = 0.012)
Q-9) Which channels have a significant influence on the total unit sales at 95%
confidence level?

Significant Channels:
Q-9) Which channels have a significant influence on the total unit sales at 95%
confidence level?

Significant Channels:

Print (GRP) & Search (No. of impressions) have significant influence on the
total unit sales at 95% confidence level as their P-value is less than 0.05.
Q-10) State the regression coefficients of the channels?

Regression Coefficients:

TV: -8.490374436
Radio: 4.878610037
Print: 38.43982031
Search: 8.574068255
Facebook: -0.919633069
Q-11) State the multiple linear regression equation based on the results
obtained?

Regression equation:

Y= 1683.023565+ 38.43982031(Print)+ 8.574068255(Search)

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