Uplift Modeling And Its Implications For B2b Customer Churn Prediction: A Segmentation-Based Modeling Approach

Business-to-business (B2B) customer retention relies heavily on analytics and predictive modeling to support decision making. Given this, we introduce uplift modeling as a relevant prescriptive analytics tool. In particular, the uplift logit leaf model offers a segmentation-based algorithm that combines predictive performance with interpretability. Applied to a real-world data set of 6432 customers of a European software provider, the uplift logit leaf model achieves superior performance relative to three other popular uplift models in our study. The accessibility of output gained from the uplift logit leaf model also is showcased with a case study, which reveals relevant managerial insights. This new tool thus delivers novel insights in the form of customized, global, and segment-level visualizations that are especially pertinent to industrial marketing settings. Overall, the findings affirm the viability of uplift modeling for improving decisions related to B2B customer retention management.