Feature Selection for Customer Churn Prediction: A Review on the Methods & Techniques applied in the Telecom Industry

The rapid growth of the telecommunication industry has significantly contributed to the rise of interest in customer churn prediction studies within the telecom domain. Customer retention is one of the significant factors affecting the livelihood of businesses across every industry. Therefore, it is many companies’ priority to safeguard the existing customers, from cancelling their subscription and migrating to the competitors’ company, which is also known as customer churn. One of the most crucial processes in achieving a high-performance churn prediction model is feature selection. Unfortunately, this process is not highlighted in many studies within this domain. It was found that few studies did not even include the feature selection process as part of their data preparation from several articles published between 2016 and 2021. Countable studies collected, were conducted evolving around feature selection by comparing different methods. Moreover, the researchers whose data preparation process involved feature selection used manual feature selection and automatic feature selection. The automatic feature selection can then be further classified into filter method, wrapper method and embedded method. The most prominent feature selection method found in this survey was Fisher Score, which is a filter method, followed by Random Forest, which is an embedded method.

I. Introduction

With the movement restriction regulations implemented by many governments due to the Covid-19 pandemic, the demand for telecom services drastically increased as employees are working from home and students are learning through online platforms [1]. In addition to the higher demand, the advancement of technology has also caused the telecommunication industry to be one of the most rapidly growing industries [2]. This has significantly contributed to the increase of competitiveness of the market, which consequently widens the choices for the customers and makes it more convenient for customers to migrate to the competitor’s company [3], [4]. The activity that the customers who cancel their subscription of services of a telco to migrate to another is known as customer churn [5]. The customers are likely to churn when they receive the unsatisfied quality of services or the existing subscription plan that are not in line with their preferences [6]. This can cause a plummet in the company’s profit level, which then fails to retain a privileged position within the market [7]. The businesses can employ one of the three main strategies such as to acquire new customers, upselling existing customers, or lastly, maximize the customers’ retention period to survive in this challenging environment [8].