Telecom Customer Churn Analysis

This is an analysis of Telecom customer churn from Maven’s playground. The analysis was carried out using Power BI and SQL. Power BI was used to visualize some points and SQL was used to drill deeper.

The dataset contained records of 7043 customers from a telecommunications company in California. Revenue incurred from the customers for the period under review was $21.37m. The total number of churned customers in this analysis is 1869 which is 26.54% of the total customers, and the revenue from Churned customers was $3.68m.

Digging Deeper to Understand Churn:

Further analysis of the 1869 churned customers reveals that 88.6% of the churned customers use the Month-to-Month contract type, 8.9% use the One-Year contract type and 2.6% use the Two-Year contract. This clearly means that the Month-to-Month customers are at high risk.

Revenue generated from the high-risk customers is $6.16m, which is 28.8% of the total revenue. Out of the revenue generated from these customers, $2.49m has been lost to churn. This is revenue that will not be generated in the next quarter.

51.3% of the total customers, that is 3,610 subscribers opt for the Month-to-Month contract, 26.7% of subscribers use the Two-Year contract while 22% opt for One Year contact. Out of the 3,610 Month to Month customers, 1,655 have been lost to churn, this is about 45.84% of the total Month to Month Customers. This is quite a lot.

Analyzing the reasons for churn shows that 45% of the customers lost were as a result of offers from competitors, 17.17% were lost due to dissatisfaction with services received, 16.80% were lost because of the attitude of customer service agents, and 11.29% were lost as a result of price. Digging deeper to identify the internet service type used by churned customers shows that 66.16% of churned customers use Fiber Optic Service, 16.43% use DSL and 11.40% use Cable.

Recommendation:

The focus here should be on converting Month to Month customers to One Year or Two-Year customers. Preferable Two-Year Customers. This can be achieved by looking into the following points:

• Competitors clearly offer better services than what is currently available to subscribers. This should be investigated, and services rendered should be upgraded to meet or surpass what is obtainable from competitors.

• Upgrading services rendered could reduce customer dissatisfaction thereby increasing the possibility of customers extending their contract type to longer periods.

• 16.80% of customers that have been lost were as a result of attitude from service agents. This can be eliminated by training service agents to understand empathy and proper customer interaction.

• The Fiber Optic internet service may not be operating at par. A lot of customers who use this service are lost to churn. It is important that this service is properly looked into and upgraded, as this will help to retain customers.

• The current pricing structure should be looked into, and adjustments properly made to entice and retain customers.

The SQL queries for this analysis can be found here: https://bit.ly/3zpkDxo