Assignment 9
Conor McGuigan
2024-04-11
Objective
Predict customer attrition using a credit card dataset and the
randomForest algorithm from the randomForestpackage.
Data Prep
Split the data (10127 observations), into training and validation datasets (.7/.3 , 7137/2990)
Variable Importance
Model Accuracy
Using the validation data, it is observed that the model can:
- Correctly Predict 81.3% of Customer who left
- Misidentify Retained Customers for those who left 1.1% of the time
##
##
## Cell Contents
## |-------------------------|
## | N |
## | Chi-square contribution |
## | N / Row Total |
## | N / Col Total |
## | N / Table Total |
## |-------------------------|
##
##
## Total Observations in Table: 2990
##
##
## | validation_cc$predicted_cc_rf
## validation_cc$Attrition_Flag | Attrited Customer | Existing Customer | Row Total |
## -----------------------------|-------------------|-------------------|-------------------|
## Attrited Customer | 392 | 90 | 482 |
## | 1558.549 | 253.999 | |
## | 0.813 | 0.187 | 0.161 |
## | 0.936 | 0.035 | |
## | 0.131 | 0.030 | |
## -----------------------------|-------------------|-------------------|-------------------|
## Existing Customer | 27 | 2481 | 2508 |
## | 299.530 | 48.815 | |
## | 0.011 | 0.989 | 0.839 |
## | 0.064 | 0.965 | |
## | 0.009 | 0.830 | |
## -----------------------------|-------------------|-------------------|-------------------|
## Column Total | 419 | 2571 | 2990 |
## | 0.140 | 0.860 | |
## -----------------------------|-------------------|-------------------|-------------------|
##
## Financial Impact of Model
- Customer Retention Program Cost per year per customer= $100
- Customer Retention Program Cost per year for 419 customers= $41,900
- Customer Retention Program Benefit = $90.46 per customer per year
- Net Customer Retention Program Benefit = $228,580