Mining the dominant patterns of customer shifts between segments by using top-k and distinguishing sequential rules

Abstract

Purpose

The purpose of this paper is to detect different behavioral groups and the dominant patterns of customer shifts between segments of different values over time.

Design/methodology/approach

A new hybrid methodology is presented based on clustering techniques and mining top-k and distinguishing sequential rules. This methodology is implemented on the data of 14,772 subscribers of a mobile phone operator in Tehran, the capital of Iran. The main data include the call detail records and event detail records data that was acquired from the IT department of this operator.

Findings

Seven different behavioral groups of customer shifts were identified. These groups and the corresponding top-k rules represent the dominant patterns of customer behavior. The results also explain the relation of customer switching behavior and segment instability, which is an open problem.

Practical implications

The findings can be helpful to improve marketing strategies and decision making and for prediction purposes. The obtained rules are relatively easy to interpret and use; this can strengthen the practicality of results.

Originality/value

A new hybrid methodology is proposed that systematically extracts the dominant patterns of customer shifts. This paper also offers a new definition and framework for discovering distinguishing sequential rules. Comparing with Markov chain models, this study captures the customer switching behavior in different levels of value through interpretable sequential rules. This is the first study that uses sequential and distinguishing rules in this domain.

Citation

Akhondzadeh-Noughabi, E. and Albadvi, A. (2015), "Mining the dominant patterns of customer shifts between segments by using top-k and distinguishing sequential rules", Management Decision, Vol. 53 No. 9, pp. 1976-2003. https://doi.org/10.1108/MD-09-2014-0551