Bayesian semiparametric customer base segmentation of mobile phone users based on longitudinal traffic data
Customer segmentation is one of the most important purposes of customer base analysis for telecommunication companies. Because companies accumulate very large amounts of data on customer behavior, segmentation is typically achieved by profiling and clustering traffic behavior jointly with demographi...
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Published in | Applied stochastic models in business and industry Vol. 31; no. 5; pp. 721 - 731 |
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Main Author | |
Format | Journal Article |
Language | English |
Published |
Blackwell Publishing Ltd
01.09.2015
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Subjects | |
Online Access | Get full text |
ISSN | 1524-1904 1526-4025 |
DOI | 10.1002/asmb.2085 |
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Abstract | Customer segmentation is one of the most important purposes of customer base analysis for telecommunication companies. Because companies accumulate very large amounts of data on customer behavior, segmentation is typically achieved by profiling and clustering traffic behavior jointly with demographic data and contracts characteristics. Unfortunately, most algorithms and models used for segmentation do not take into account the longitudinal characteristics of data. In particular, in telecommunication traffic analysis, the importance of decreasing patterns of traffic in customers' lives is well known, and it is relevant to aggregate all clients with such a pattern, while other unknown clusters may be of interest for the marketing manager. Our approach to address this problem is based on specifying the distribution of functions as a mixture of a parametric hierarchical model describing the decreasing pattern segment and a nonparametric contamination that allows unanticipated curve shapes in subjects' traffic. The parametric component is chosen based on prior knowledge, while the contamination is characterized as a functional Dirichlet process. Copyright © 2014 John Wiley & Sons, Ltd. |
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AbstractList | Customer segmentation is one of the most important purposes of customer base analysis for telecommunication companies. Because companies accumulate very large amounts of data on customer behavior, segmentation is typically achieved by profiling and clustering traffic behavior jointly with demographic data and contracts characteristics. Unfortunately, most algorithms and models used for segmentation do not take into account the longitudinal characteristics of data. In particular, in telecommunication traffic analysis, the importance of decreasing patterns of traffic in customers' lives is well known, and it is relevant to aggregate all clients with such a pattern, while other unknown clusters may be of interest for the marketing manager. Our approach to address this problem is based on specifying the distribution of functions as a mixture of a parametric hierarchical model describing the decreasing pattern segment and a nonparametric contamination that allows unanticipated curve shapes in subjects' traffic. The parametric component is chosen based on prior knowledge, while the contamination is characterized as a functional Dirichlet process. Copyright © 2014 John Wiley & Sons, Ltd. Customer segmentation is one of the most important purposes of customer base analysis for telecommunication companies. Because companies accumulate very large amounts of data on customer behavior, segmentation is typically achieved by profiling and clustering traffic behavior jointly with demographic data and contracts characteristics. Unfortunately, most algorithms and models used for segmentation do not take into account the longitudinal characteristics of data. In particular, in telecommunication traffic analysis, the importance of decreasing patterns of traffic in customers' lives is well known, and it is relevant to aggregate all clients with such a pattern, while other unknown clusters may be of interest for the marketing manager. Our approach to address this problem is based on specifying the distribution of functions as a mixture of a parametric hierarchical model describing the decreasing pattern segment and a nonparametric contamination that allows unanticipated curve shapes in subjects' traffic. The parametric component is chosen based on prior knowledge, while the contamination is characterized as a functional Dirichlet process. |
Author | Scarpa, Bruno |
Author_xml | – sequence: 1 givenname: Bruno surname: Scarpa fullname: Scarpa, Bruno email: Correspondence to: Bruno Scarpa, Department of Statistical Sciences, University of Padua, Via Cesare Battisti 241, 35121 Padua, Italy., scarpa@stat.unipd.it organization: Department of Statistical Sciences, University of Padua, Via Cesare Battisti 241, 35121, Padua, Italy |
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Cites_doi | 10.1093/biomet/92.2.419 10.1111/j.1541-0420.2007.00829.x 10.1111/1467-9868.00342 10.1002/9780470316801 10.1016/j.tele.2013.08.006 10.1111/j.1541-0420.2007.00761.x 10.1214/aos/1176342360 10.1002/0470863692 10.1080/01621459.1995.10476550 10.1111/j.1541-0420.2008.01163.x 10.1111/1467-9868.00265 10.1093/biomet/83.2.275 10.4018/jssoe.2011070101 10.1007/978-1-4757-7107-7 10.1108/03090560710737552 10.1080/01621459.2013.866564 10.1016/j.eswa.2008.02.021 10.1214/088342305000000016 10.1198/016214501753381913 10.1002/9781119207863 10.1214/aos/1176342752 10.1198/jasa.2009.0001 10.1093/bioinformatics/18.9.1194 10.1016/j.tele.2013.08.004 10.1177/0092070300281006 10.1016/j.tele.2013.04.004 10.1093/biomet/asn054 |
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References_xml | – reference: Vanden Abeele M, Antheunis ML, Schouten AP. Me, myself and my mobile: a segmentation of youths based on their attitudes towards the mobile phone as a status instrument. Telematics and Informatics 2014; 31:194-208. – reference: Behseta S, Kass RE, Wallstrom GL. Hierarchical models for assessing variability among functions. Biometrika 2005; 92:419-434. – reference: McDonald M, Dunbar I. Market segmentation. How to do it, how to profit from it 4th Edition. John Wiley & Sons: Chichester, 2012. – reference: Sheth JN, Sisodia RS, Sharma A. The antecedents and consequences of customer-centric marketing. Journal of the Academy of Marketing Science 2000; 28:55-66. – reference: Jasra A, Holmes CC, Stephens DA. Markov chain Monte Carlo methods and the label switching problem in Bayesian mixture modeling. Statistical Science 2005; 20:50-67. – reference: Escobar MD, West M. Bayesian density estimation and inference using mixtures. Journal of the American Statistical Association 1995; 90:577-588. – reference: Bush CA, MacEachern SN. A semiparametric Bayesian model for randomised block designs. Biometrika 1996; 83:275-285. – reference: Sethuraman J. A constructive definition of Dirichlet priors. Statistica Sinica 1994; 4:639-650. – reference: Rossi PE, Allenby GM, McCulloch R. Bayesian Statistics and Marketing. John Wiley & Sons: New York, 2005. – reference: Scarpa B, Dunson DB. Bayesian hierarchical functional data analysis via contaminated informative priors. Biometrics 2009; 65:772-780. – reference: Scarpa B, Dunson DB. Enriched stick breaking processes for functional data. Journal of the American Statistical Association 2014; 109:647-660. – reference: Sell A, Walden P, Carlsson C. Segmentation matters: an exploratory study of mobile service users. International Journal of Systems and Service-Oriented Engineering 2011; 2:1-17. – reference: Durante D, Scarpa B, Dunson D. Locally adaptive factor processes for multivariate time series. Journal of Machine Learning Research 2014; 15:1493-1522. – reference: Bigelow JL, Dunson DB. Bayesian semiparametric joint models for functional predictors. Journal of the Americal Statistical Association 2009; 104:26-36. – reference: Berry MJA, Linoff G. Data Mining Techniques: For Marketing, Sales, and Customer Support. John Wiley & Sons: New York, 1997. – reference: Ke C, Wang Y. Semiparametric nonlinear mixed-effects models and their application (with discussion). Journal of the American Statistical Association 2001; 96:1272-1298. – reference: James GM. Generalized linear models with functional predictors. Journal of the Royal Statistical Scoiety, Series B 2002; 64:411-432. – reference: Medvedovic M, Sivaganesan S. Bayesian infinite mixture model based clustering of gene expression profiles. Bioinformatics 2002; 18(9):1194-1206. – reference: Rodriguez A, Dunson DB, Gelfand AE. Bayesian nonparametric functional analysis through density estimation. Biometrika 2009; 96:149-162. – reference: Ngui EWT, Xiu L, Chau DCK. Application of data mining techniques in customer relationship management: a literature review and classification. Expert System with Applications 2009; 36:2592-2602. – reference: Ramsay JO, Silverman BW. Functional Data Analysis. Springer: New York, 1997. – reference: Kaufman L, Rousseeuw PJ Finding Groups in Data: An Introduction to Cluster Analysis. Wiley: New York, 1990. – reference: Ferguson TS. A Bayesian analysis of some nonparametric problems. The Annals of Statistics 1973; 1:209-230. – reference: Ferguson TS. Prior distributions on spaces of probability measures. The Annals of Statistics 1974; 2:615-629. – reference: Azzalini A, Scarpa B. Analisi Dei Dati e Data Mining. Oxford University Press: New York, 2012. – reference: Thompson WK, Rosen O. A Bayesian model for sparse functional data. Biometrics 2008; 64:54-63. – reference: Quinn L, Hines T, Bennison D. Making sense of market segmentation: a fashion retailing case. European Journal of Marketing 2007; 41:439-465. – reference: Sell A, Mezei J, Walden P. An attitude-based latent class segmentation analysis of mobile phone users. Telematics and Informatics 2014; 31:209-219. – reference: Hamka F, Bouwman H, de Reuver M, Kroesen M. Mobile customer segmentation based on smartphone measurement. Telematics and Informatics 2014; 31:220-227. – reference: Bigelow JL, Dunson DB. Bayesian adaptive regression splines for hierarchical data. Biometrics 2007; 63:724-732. – reference: Stephens M. Dealing with label switching in mixture models. Journal of the Royal Statistical Society B 2000; 62:795-809. – reference: Janusz G. Data mining and complex telecommunications problems modeling. 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some nonparametric problems publication-title: The Annals of Statistics – volume: 41 start-page: 439 year: 2007 end-page: 465 article-title: Making sense of market segmentation: a fashion retailing case publication-title: European Journal of Marketing – volume: 36 start-page: 2592 year: 2009 end-page: 2602 article-title: Application of data mining techniques in customer relationship management: a literature review and classification publication-title: Expert System with Applications – volume: 62 start-page: 795 year: 2000 end-page: 809 article-title: Dealing with label switching in mixture models publication-title: Journal of the Royal Statistical Society B – volume: 2 start-page: 615 year: 1974 end-page: 629 article-title: Prior distributions on spaces of probability measures publication-title: The Annals of Statistics – volume: 4 start-page: 639 year: 1994 end-page: 650 article-title: A constructive definition of Dirichlet priors publication-title: Statistica Sinica – ident: 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Snippet | Customer segmentation is one of the most important purposes of customer base analysis for telecommunication companies. Because companies accumulate very large... |
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SubjectTerms | Algorithms Bayesian nonparametrics Contamination customer profiling Dirichlet problem functional clustering functional data analysis Mathematical models Segmentation statistical methods for customer relationship management Telecommunications telephone traffic Traffic engineering Traffic flow |
Title | Bayesian semiparametric customer base segmentation of mobile phone users based on longitudinal traffic data |
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