BDA601 - Big Data and Analytics Visualisation and Model Development Assignment

Assignment Task

Task Summary

Customer churn, also known as customer attrition, refers to the movement of customers from one service provider to another. It is well known that attracting new customers costs significantly more than retaining existing customers. Additionally, long-term customers are found to be less costly to serve and less sensitive to competitors’ marketing activities. Thus, predicting customer churn is valuable to telecommunication industries, utility service providers, paid television channels, insurance companies and other business organisations providing subscription-based services. Customer-churn prediction allows for targeted retention planning.

In this Assessment, you will build a machine learning (ML) model to predict customer churn using the principles of ML and big data tools. As part of this Assessment, you will write a word report that will include the following:

a) A predictive model from a given dataset that follows data mining principles and techniques;

b) Explanations as to how to handle missing values in a dataset; and

c) An interpretation of the outcomes of the customer churn analysis.

Please refer to the Task Instructions (below) for details on how to complete this task.

Task Instructions

1. Dataset Construction Kaggle telco churn dataset is a sample dataset from IBM, containing 21 attributes of approximately 7,043 telecommunication customers. In this Assessment, you are required to work with a modified version of this dataset (the dataset can be found at the URL provided below). Modify the dataset by removing the following attributes: MonthlyCharges, OnlineSecurity, StreamingTV, InternetService and Partner.

As the dataset is in .csv format, any spreadsheet application, such as Microsoft Excel or Open Office Calc, can be used to modify it. You will use your resulting dataset, which should comprise 7,043 observations and 16 attributes, to complete the subsequent tasks. The ‘Churn’ attribute (i.e., the last attribute in the dataset) is the target of your churn analysis.

2. Model Development From the dataset constructed in the previous step, present appropriate data visualisation and descriptive statistics, then develop a ‘decision-tree’ model to predict customer churn. The model can be developed in Jupyter Notebook using Python and Spark’s Machine Learning Library (Pyspark MLlib). You can use any other platform if you find it more efficient. The notebook should include the following sections:

a) Problem Statement In this section, briefly state the context and the problem you will solve in the notebook.

b) Exploratory Data Analysis In this section, perform both a visual and statistical exploratory analysis to gain insights about the dataset.

c) Data Cleaning and Feature Selection In this section, perform data pre-processing and feature selection for the model, which you will build in the next section.

d) Model Building In this section, use the pre-processed data and the selected features to build a ‘decision-tree’ model to predict customer churn.

In the notebook, the code should be well documented, the graphs and charts should be neatly labelled, the narrative text should clearly state the objectives and a logical justification for each of the steps should be provided.

3. Handling Missing Values The given dataset has very few missing values; however, in a real-world scenario, datascientists often need to work with datasets with many missing values. If an attribute is important to build an effective model and have significant missing values, then the datascientists need to come up with strategies to handle any missing values.

From the ‘decision-tree’ model, built in the previous step, identify the most important attribute. If a significant number of values were missing in the most important attribute column, implement a method to replace the missing values and describe that method in your report. 

4. Interpretation of Churn Analysis Modelling churn is difficult because there is inherent uncertainty when measuring churn. Thus, it is important not only to understand any limitations associated with a churn analysis but also to be able to interpret the outcomes of a churn analysis.

In your report, interpret and describe the key findings that you were able to discover as part of your churn analysis. Describe the following facts with supporting details:

• The effectiveness of your churn analysis: What was the percentage of time at which your analysis was able to correctly identify the churn? Can this be considered a satisfactory outcome? Explain why or why not;
• Who is churning: Describe the attributes of the customers who are churning and explain what is driving the churn; and
• Improving the accuracy of your churn analysis: Describe the effects that your previous steps, model development and handling of missing values had on the outcome of your churn analysis and how the accuracy of your churn analysis could be improved.

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