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 inApplied stochastic models in business and industry Vol. 31; no. 5; pp. 721 - 731
Main Author Scarpa, Bruno
Format Journal Article
LanguageEnglish
Published Blackwell Publishing Ltd 01.09.2015
Subjects
Online AccessGet full text
ISSN1524-1904
1526-4025
DOI10.1002/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.
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
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  givenname: Bruno
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  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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CitedBy_id crossref_primary_10_1016_j_telpol_2015_09_004
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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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