Random Forest
Data Summary: Using data about credit card customers to predict
customer attrition
The variables: customer attrition, education level, marital status,
and card category are continuous but should be categorical
## CLIENTNUM Attrition_Flag Customer_Age Gender
## Min. :708082083 Length:10127 Min. :26.00 Length:10127
## 1st Qu.:713036770 Class :character 1st Qu.:41.00 Class :character
## Median :717926358 Mode :character Median :46.00 Mode :character
## Mean :739177606 Mean :46.33
## 3rd Qu.:773143533 3rd Qu.:52.00
## Max. :828343083 Max. :73.00
## Dependent_count Education_Level Marital_Status Income_Category
## Min. :0.000 Length:10127 Length:10127 Length:10127
## 1st Qu.:1.000 Class :character Class :character Class :character
## Median :2.000 Mode :character Mode :character Mode :character
## Mean :2.346
## 3rd Qu.:3.000
## Max. :5.000
## Card_Category Months_on_book Total_Relationship_Count
## Length:10127 Min. :13.00 Min. :1.000
## Class :character 1st Qu.:31.00 1st Qu.:3.000
## Mode :character Median :36.00 Median :4.000
## Mean :35.93 Mean :3.813
## 3rd Qu.:40.00 3rd Qu.:5.000
## Max. :56.00 Max. :6.000
## Months_Inactive_12_mon Contacts_Count_12_mon Credit_Limit
## Min. :0.000 Min. :0.000 Min. : 1438
## 1st Qu.:2.000 1st Qu.:2.000 1st Qu.: 2555
## Median :2.000 Median :2.000 Median : 4549
## Mean :2.341 Mean :2.455 Mean : 8632
## 3rd Qu.:3.000 3rd Qu.:3.000 3rd Qu.:11068
## Max. :6.000 Max. :6.000 Max. :34516
## Total_Revolving_Bal Avg_Open_To_Buy Total_Amt_Chng_Q4_Q1 Total_Trans_Amt
## Min. : 0 Min. : 3 Min. :0.0000 Min. : 510
## 1st Qu.: 359 1st Qu.: 1324 1st Qu.:0.6310 1st Qu.: 2156
## Median :1276 Median : 3474 Median :0.7360 Median : 3899
## Mean :1163 Mean : 7469 Mean :0.7599 Mean : 4404
## 3rd Qu.:1784 3rd Qu.: 9859 3rd Qu.:0.8590 3rd Qu.: 4741
## Max. :2517 Max. :34516 Max. :3.3970 Max. :18484
## Total_Trans_Ct Total_Ct_Chng_Q4_Q1 Avg_Utilization_Ratio
## Min. : 10.00 Min. :0.0000 Min. :0.0000
## 1st Qu.: 45.00 1st Qu.:0.5820 1st Qu.:0.0230
## Median : 67.00 Median :0.7020 Median :0.1760
## Mean : 64.86 Mean :0.7122 Mean :0.2749
## 3rd Qu.: 81.00 3rd Qu.:0.8180 3rd Qu.:0.5030
## Max. :139.00 Max. :3.7140 Max. :0.9990
Data Summary: Now with categorical variables as factors, and a
random variable for splitting the data
The Credit Card data set has 10127 observations
## CLIENTNUM Attrition_Flag Customer_Age
## Min. :708082083 Attrited Customer:1627 Min. :26.00
## 1st Qu.:713036770 Existing Customer:8500 1st Qu.:41.00
## Median :717926358 Median :46.00
## Mean :739177606 Mean :46.33
## 3rd Qu.:773143533 3rd Qu.:52.00
## Max. :828343083 Max. :73.00
##
## Gender Dependent_count Education_Level Marital_Status
## Length:10127 Min. :0.000 College :1013 Divorced: 748
## Class :character 1st Qu.:1.000 Doctorate : 451 Married :4687
## Mode :character Median :2.000 Graduate :3128 Single :3943
## Mean :2.346 High School :2013 Unknown : 749
## 3rd Qu.:3.000 Post-Graduate: 516
## Max. :5.000 Uneducated :1487
## Unknown :1519
## Income_Category Card_Category Months_on_book Total_Relationship_Count
## Length:10127 Blue :9436 Min. :13.00 Min. :1.000
## Class :character Gold : 116 1st Qu.:31.00 1st Qu.:3.000
## Mode :character Platinum: 20 Median :36.00 Median :4.000
## Silver : 555 Mean :35.93 Mean :3.813
## 3rd Qu.:40.00 3rd Qu.:5.000
## Max. :56.00 Max. :6.000
##
## Months_Inactive_12_mon Contacts_Count_12_mon Credit_Limit
## Min. :0.000 Min. :0.000 Min. : 1438
## 1st Qu.:2.000 1st Qu.:2.000 1st Qu.: 2555
## Median :2.000 Median :2.000 Median : 4549
## Mean :2.341 Mean :2.455 Mean : 8632
## 3rd Qu.:3.000 3rd Qu.:3.000 3rd Qu.:11068
## Max. :6.000 Max. :6.000 Max. :34516
##
## Total_Revolving_Bal Avg_Open_To_Buy Total_Amt_Chng_Q4_Q1 Total_Trans_Amt
## Min. : 0 Min. : 3 Min. :0.0000 Min. : 510
## 1st Qu.: 359 1st Qu.: 1324 1st Qu.:0.6310 1st Qu.: 2156
## Median :1276 Median : 3474 Median :0.7360 Median : 3899
## Mean :1163 Mean : 7469 Mean :0.7599 Mean : 4404
## 3rd Qu.:1784 3rd Qu.: 9859 3rd Qu.:0.8590 3rd Qu.: 4741
## Max. :2517 Max. :34516 Max. :3.3970 Max. :18484
##
## Total_Trans_Ct Total_Ct_Chng_Q4_Q1 Avg_Utilization_Ratio random
## Min. : 10.00 Min. :0.0000 Min. :0.0000 Min. :0.0000653
## 1st Qu.: 45.00 1st Qu.:0.5820 1st Qu.:0.0230 1st Qu.:0.2531897
## Median : 67.00 Median :0.7020 Median :0.1760 Median :0.4945483
## Mean : 64.86 Mean :0.7122 Mean :0.2749 Mean :0.4976151
## 3rd Qu.: 81.00 3rd Qu.:0.8180 3rd Qu.:0.5030 3rd Qu.:0.7433762
## Max. :139.00 Max. :3.7140 Max. :0.9990 Max. :0.9999414
##
Data Split: 70/30 into training and validation datasets
- The training data has 7137 observations
- The validation data has 2990 observations
Random Forest
## Length Class Mode
## call 5 -none- call
## type 1 -none- character
## predicted 7137 factor numeric
## err.rate 1500 -none- numeric
## confusion 6 -none- numeric
## votes 14274 matrix numeric
## oob.times 7137 -none- numeric
## classes 2 -none- character
## importance 80 -none- numeric
## importanceSD 60 -none- numeric
## localImportance 0 -none- NULL
## proximity 0 -none- NULL
## ntree 1 -none- numeric
## mtry 1 -none- numeric
## forest 14 -none- list
## y 7137 factor numeric
## test 0 -none- NULL
## inbag 0 -none- NULL
## terms 3 terms call
Variable Importance
The accuracy of the model tested on the validation data
##
##
## Cell Contents
## |-------------------------|
## | N |
## | Chi-square contribution |
## | N / Row Total |
## | N / Col Total |
## | N / Table Total |
## |-------------------------|
##
##
## Total Observations in Table: 2990
##
##
## | val$predicted_Attrition_Flag
## val$Attrition_Flag | Attrited Customer | Existing Customer | Row Total |
## -------------------|-------------------|-------------------|-------------------|
## Attrited Customer | 390 | 92 | 482 |
## | 1544.620 | 251.031 | |
## | 0.809 | 0.191 | 0.161 |
## | 0.933 | 0.036 | |
## | 0.130 | 0.031 | |
## -------------------|-------------------|-------------------|-------------------|
## Existing Customer | 28 | 2480 | 2508 |
## | 296.853 | 48.244 | |
## | 0.011 | 0.989 | 0.839 |
## | 0.067 | 0.964 | |
## | 0.009 | 0.829 | |
## -------------------|-------------------|-------------------|-------------------|
## Column Total | 418 | 2572 | 2990 |
## | 0.140 | 0.860 | |
## -------------------|-------------------|-------------------|-------------------|
##
##
Financial Impact of the Model
- The credit card company forgave the $100 annual fee for 418
customers that were predicted to leave, totaling 41,800 dollars.
- The value of a customer is 2,300 dollars per year (on average).
- With a success rate of 30%, the credit card company should retain
30% of the predicted attrited customers which is 390. This calculates to
approximately 117 customers.
- 117 * 2,300 = 269,100 dollars per year.
- Net = 269,100 - 41,800 = 227,300 dollars.
- 227,300/2990 = 76.02 dollar profit per customer predicted.