Skip to main content

Predicting Customer Churn Using Machine Learning in IT Startups

  • Conference paper
  • First Online:
Lecture Notes in Computational Intelligence and Decision Making (ISDMCI 2021)

Abstract

This work is devoted to the consideration of the issues of increasing the development of start-up projects with using modern methods of artificial intelligence. As a rule, such projects are based on innovations and their implementation requires registration as independent enterprises. Operating in market conditions, most IT companies are forced to develop new innovative ideas and present them in the form of startups At the same time, small and medium-sized businesses interact with many external independent potential customers. Such users of information systems may subsequently become clients of such enterprises. The growth and development of these SaaS enterprises relies heavily on the average customer, which is the topic of this article, with the goal of reducing customer churn. The direction of such research is addressed in many of the rules of thumb for SaaS metrics. In these conditions, it is important to take into account the completeness of the functional interaction of SaaS customers, the authors proposed a hypothesis on the possibility of using intelligent methods for predicting customer churn using deep learning neural networks. At the same time, the needs of the stakeholders of such projects should be taken into account, the satisfaction of which occurs when interacting with an innovative IT product. To describe the interactions, the authors consider mathematical models, and also propose modeling methods. To conduct chain training, Python functionality is used, with the processing of user activity datasets. In this paper, a section of the conclusion is proposed in which the results obtained are discussed and evaluated.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 169.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 219.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

References

  1. https://js.tensorflow.org/api/latest/#metrics.binaryCrossentropy

  2. https://arxiv.org/abs/1412.6980

  3. Customer acquisition vs. retention costs - statistics and trends. https://www.invespcro.com/blog/customer-acquisition-retention/

  4. Four pathways to digital growth that work for b2b companies. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/four-pathways-to-digital-growth-that-work-for-b2b-companies

  5. Global software as a service (SaaS) market report 2020. https://www.prnewswire.com

  6. Interviews with experts of the Ukrainian internet market. https://adsider.com/ua/kejsi/intervyu

  7. Public cloud trends in 2019 and beyond. https://community.spiceworks.com/blog/3208-public-cloud-trends-in-2019-and-beyond

  8. Results of the 2013 SaaS small business conversion survey. https://www.groovehq.com/blog/saas-conversion-survey-results

  9. SaaS spend to double by 2020. Will you be ready? https://www.blissfully.com/blog/saas-spending-to-double-by-2020-will-you-be-ready/

  10. SaaS spending hits \$100 billion annual run rate. Microsoft extends its leadership. https://www.srgresearch.com/articles/saas-spending-hits-100-billion-annual-run-rate-microsoft-extends-its-leadership

  11. Startup statistics - the numbers you need to know. https://smallbiztrends.com/2019/03/startup-statistics-small-business.html

  12. Startup statistics - the numbers you need to know, small business trends. https://smallbiztrends.com/2019/03/startup-statistics-small-business.html

  13. Startupranking. https://www.startupranking.com

  14. The top 20 reasons startups fail. https://www.cbinsights.com/research/startup-failure-reasons-top/

  15. What is software as a service (SaaS): A beginner’s guide - salesforce. https://www.salesforce.com/in/saas/

  16. Cloud computing market by service, deployment model, organization size, workload, vertical and region - global forecast. Technical report (2020)

    Google Scholar 

  17. Blank, S.: The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company Hardcover, p. 608. KandS Ranch (2020)

    Google Scholar 

  18. Chatfield, A., Reddick, C.: Customer agility and responsiveness through big data analytics for public value creation. A case study of Houston 311 on-demand services. Gov. Inf. Q. 35(2), 336–347 (2018)

    Article  Google Scholar 

  19. Coussement, K., VandenPoel, D.: Churn prediction in subscription services: an application of support vector machines while comparing two parameter-selection techniques. Expert Syst. Appl. 34, 313–327 (2008). https://doi.org/10.1016/j.eswa.2006.09.038

    Article  Google Scholar 

  20. Coussement, K., VandenPoel, D.: Improving customer attrition prediction by integrating emotions from client/company interaction emails and evaluating multiple classifiers. Expert Syst. Appl. 6127–6134 (2009). https://doi.org/10.1016/j.eswa.2008.07.021

  21. Euler, T.: Churn prediction in telecommunications using MiningMart. In: 2005 Workshop on Data Mining and Business, pp. 1–2 (2005)

    Google Scholar 

  22. Gogunskii, V., Kolesnikov, O., Oborska, G., Harelik, S.L.D.: Representation of project systems using the Markov chain. Eastern-Eur. J. Enterp. Technol. (85), 25–32 (2017). https://doi.org/10.15587/1729-4061.2017.97883

  23. Hiziroglu, A., Seymen, O.: Modelling customer churn using segmentation and data mining. Front. Artif. Intell. Appl. 259–271 (2014). https://doi.org/10.3233/978-1-61499-458-9-259

  24. Madden, G., Savage, S., Coble-Neal, G.: Subscriber churn in the Australian ISP market. Inf. Econ. Policy 11, 195–207 (1999)

    Article  Google Scholar 

  25. Morozov, V., Kalnichenko, O., Kolomiiets, A.: Research of the impact of changes based on external influences in complex it projects. In: 2019 IEEE International Conference on Advanced Trends in Information Theory, pp. 481–488 (2019). https://doi.org/10.1109/ATIT49449.2019.9030441

  26. Morozov, V., Mezentseva, O., Proskurin, M.: Trainable neural networks modelling for a forecasting of start-up product development. In: 2020 IEEE International Conference on Data Stream Mining and Processing, pp. 55–60 (2020). https://doi.org/10.1109/DSMP47368.2020.9204264

  27. Morozov, V., Mezentseva, O., Steshenko, G., Proskurin, M.: Product development of start-up through modeling of customer interaction based on data mining. In: Babichev, S., Peleshko, D., Vynokurova, O. (eds.) Data Stream Mining & Processing. DSMP 2020. Communications in Computer and Information Science, vol. 1158, pp. 399–415. Springer, Cham (2020). https://doi.org/10.1007/978-3-030-61656-4_27

  28. Neslin, S.: Defection detection: measuring and understanding the predictive accuracy of customer churn models. J. Mark. Res. Am. Mark. Assoc. 43, 204–211 (2006)

    Google Scholar 

  29. Popp, K.: Software industry business models. IEEE Softw. 28, 26–30 (2011)

    Article  Google Scholar 

  30. Qi, J., Liu, Y.: Adtreeslogit model for customer churn prediction. Ann. Oper. Res. 168(1), 247–265 (2009). https://doi.org/10.1007/s10479-008-0400-8

    Article  MathSciNet  MATH  Google Scholar 

  31. Sherstyuk, O., Olekh, T., Kolesnikova, K.: The research on role differentiation as a method of forming the project team. Eastern-Eur. J. Enterp. Technol. 80(2), 259–271 (2016). https://doi.org/10.15587/1729-4061.2016.65681

    Article  Google Scholar 

  32. Teslia, Y., Khlevnyi, A., Khlevna, Y.: Control of informational impacts on project management. In: 2016 IEEE International Conference on Data Stream Mining and Processing, pp. 387–391 (2016). https://doi.org/10.1109/DSMP.2016.7583584

  33. Wei, C., Chiu, I.: Turning telecommunications call details to churn prediction: a data mining approach. Expert Syst. Appl. 103–112 (2002). https://doi.org/10.1016/S0957-4174(02)00030-1

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Morozov, V., Mezentseva, O., Kolomiiets, A., Proskurin, M. (2022). Predicting Customer Churn Using Machine Learning in IT Startups. In: Babichev, S., Lytvynenko, V. (eds) Lecture Notes in Computational Intelligence and Decision Making. ISDMCI 2021. Lecture Notes on Data Engineering and Communications Technologies, vol 77. Springer, Cham. https://doi.org/10.1007/978-3-030-82014-5_45

Download citation

Publish with us

Policies and ethics