DSCI4520_Regression_6

DSCI4520_Regression_6 - DSCI 4520/5240 DATA MINING DSCI...

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Lecture 6 - 1 DSCI 4520/5240 DATA MINING Some slide material taken from: SAS Education DSCI 4520/5240 Lecture 6 Regression Modeling DSCI 4520/5240 DBDSS (DATA MINING)
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Lecture 6 - 2 DSCI 4520/5240 DATA MINING Objectives Overview of Linear Regression Models The Stepwise Procedure Overview of Logistic Regression Models Interpretation of Logistic Regression coefficients
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Lecture 6 - 3 DSCI 4520/5240 DATA MINING DATA MINING AT WORK: Telstra Mobile Combats Churn with SAS® As Australia's largest mobile service provider, Telstra Mobile is reliant on highly effective churn management. In most industries the cost of retaining a customer, subscriber or client is substantially less than the initial cost of obtaining that customer. Protecting this investment is the essence of churn management. It really boils down to understanding customers -- what they want now and what they're likely to want in the future, according to SAS. "With SAS Enterprise Miner we can examine customer behaviour on historical and predictive levels, which can then show us what 'group' of customers are likely to churn and the causes," says Trish Berendsen, Telstra Mobile's head of Customer Relationship Management (CRM).
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Lecture 6 - 4 DSCI 4520/5240 DATA MINING Data Mining in the telecom industry: RingaLing Telecom RingaLing is losing 40,000 customers every month, and only winning a few of those customers back. They are painfully aware that the cost of keeping an existing customer can be up to ten times lower than the cost of acquiring a new one. They desperately need a cost effective way of decreasing customer churn rate. Until recently, RingaLing, a large public telecommunications company, held the monopoly for the entire telecommunications market. Now privatized and without the advantages of the monopolistic situation, competition is coming from consortiums of foreign denationalized companies, new entrants, and cable companies who are offering very tempting proposals to consumers.
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Lecture 6 - 5 DSCI 4520/5240 DATA MINING Data Mining in the telecom industry: RingaLing Telecom Subsequently, Martin Miner, a young and promising marketing analyst is summoned to the Marketing Director’s office and asked to solve this problem. Working with the IT department, Martin explains that he needs a way to be able to access and analyze all the company data. The CEO of RingaLing is worried by his company's falling share price and the rate at which customers are leaving. Despite substantial general price reductions, loyal customers are leaving by the thousands. The CEO gives the marketing director six months to bring the situation under control.
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Lecture 6 - 6 DSCI 4520/5240 DATA MINING Getting the lines crossed -- the difficulty of data access RingaLing has over 50 million customer files in addition to billions of call records, and data from both the customer service and the billing departments. They also have some competitive information, including competitor pricing
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DSCI4520_Regression_6 - DSCI 4520/5240 DATA MINING DSCI...

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