A Machine Learning Model for Personalized Tariff Plan based on Customer’s Behavior in the Telecom Industry

In the telecommunication industry, being able to predict customers’ behavioral pattern to successfully design and recommend a suitable tariff plan is the ultimate target. The behavioral pattern has a vital connection with the customers’ demographic background. Different researches have been done based on hypothesis testing, regression analysis, and conjoint analysis to determine the interdependencies among them and the effects on the customers’ behavioral needs. This has presented us with ample scope for research using numerous classification-based techniques. This work proposes a model to predict customer’s behavioral pattern by using their demographic data. This model was built after investigating various types of classification-based machine learning techniques including the traditional ones like decision tree, k-nearest neighbor, logistic regression, and artificial neural networks along with some ensemble techniques such as random forest, adaboost, gradient boosting machine, extreme gradient boosting, bagging, and stacking. They are applied to a dataset collected using a questionnaire in India. Among the traditional classifiers, decision tree gave the best result of 81% accuracy and random forest showed the best result among the ensemble learning techniques with an accuracy of 83%. The proposed model has shown a very positive outcome in predicting the customers’ behavioral pattern.