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demo_files//customer_churn_analysis.ipynb
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| 1 |
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{
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| 2 |
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"cells": [
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| 3 |
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{
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| 4 |
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"cell_type": "markdown",
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| 5 |
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"metadata": {},
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| 6 |
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"source": [
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| 7 |
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"# Advanced Customer Churn Prediction Analysis\n",
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| 8 |
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"\n",
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| 9 |
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"## Business Context\n",
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| 10 |
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"This notebook analyzes customer churn patterns for a telecommunications company.\n",
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| 11 |
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"Key objectives:\n",
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| 12 |
+
"- Identify high-risk customers\n",
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| 13 |
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"- Understand churn drivers\n",
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| 14 |
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"- Build predictive models\n",
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| 15 |
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"- Recommend retention strategies\n",
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| 16 |
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"\n",
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| 17 |
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"**Dataset:** 10,000 customers with 50+ features\n",
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| 18 |
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"**Target:** Binary churn indicator (Yes/No)"
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| 19 |
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]
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| 20 |
+
},
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| 21 |
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{
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| 22 |
+
"cell_type": "code",
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| 23 |
+
"execution_count": 1,
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| 24 |
+
"metadata": {},
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| 25 |
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"outputs": [],
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| 26 |
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"source": [
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| 27 |
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"import pandas as pd\n",
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| 28 |
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"import numpy as np\n",
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| 29 |
+
"import matplotlib.pyplot as plt\n",
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| 30 |
+
"import seaborn as sns\n",
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| 31 |
+
"from sklearn.model_selection import train_test_split, cross_val_score, GridSearchCV\n",
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| 32 |
+
"from sklearn.preprocessing import StandardScaler, LabelEncoder\n",
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| 33 |
+
"from sklearn.ensemble import RandomForestClassifier, GradientBoostingClassifier\n",
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| 34 |
+
"from sklearn.linear_model import LogisticRegression\n",
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| 35 |
+
"from sklearn.metrics import classification_report, confusion_matrix, roc_auc_score, roc_curve\n",
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| 36 |
+
"from sklearn.feature_selection import SelectKBest, f_classif\n",
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| 37 |
+
"import warnings\n",
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| 38 |
+
"warnings.filterwarnings('ignore')\n",
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| 39 |
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"\n",
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| 40 |
+
"# Set display options\n",
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| 41 |
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"pd.set_option('display.max_columns', None)\n",
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| 42 |
+
"sns.set_style('whitegrid')\n",
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| 43 |
+
"plt.rcParams['figure.figsize'] = (12, 6)\n",
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| 44 |
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"\n",
|
| 45 |
+
"print('Libraries imported successfully')\n",
|
| 46 |
+
"print(f'Pandas version: {pd.__version__}')\n",
|
| 47 |
+
"print(f'NumPy version: {np.__version__}')"
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| 48 |
+
]
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| 49 |
+
},
|
| 50 |
+
{
|
| 51 |
+
"cell_type": "code",
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| 52 |
+
"execution_count": 2,
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| 53 |
+
"metadata": {},
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| 54 |
+
"outputs": [
|
| 55 |
+
{
|
| 56 |
+
"name": "stdout",
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| 57 |
+
"output_type": "stream",
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| 58 |
+
"text": [
|
| 59 |
+
"Dataset shape: (10000, 52)\n",
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| 60 |
+
"Churn rate: 26.5%\n"
|
| 61 |
+
]
|
| 62 |
+
}
|
| 63 |
+
],
|
| 64 |
+
"source": [
|
| 65 |
+
"# Generate synthetic customer data\n",
|
| 66 |
+
"np.random.seed(42)\n",
|
| 67 |
+
"n_customers = 10000\n",
|
| 68 |
+
"\n",
|
| 69 |
+
"data = {\n",
|
| 70 |
+
" 'customer_id': [f'CUST_{i:05d}' for i in range(n_customers)],\n",
|
| 71 |
+
" 'tenure_months': np.random.randint(1, 72, n_customers),\n",
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| 72 |
+
" 'monthly_charges': np.random.uniform(20, 150, n_customers),\n",
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| 73 |
+
" 'total_charges': np.random.uniform(100, 8000, n_customers),\n",
|
| 74 |
+
" 'contract_type': np.random.choice(['Month-to-Month', 'One Year', 'Two Year'], n_customers),\n",
|
| 75 |
+
" 'payment_method': np.random.choice(['Electronic', 'Mailed Check', 'Bank Transfer', 'Credit Card'], n_customers),\n",
|
| 76 |
+
" 'internet_service': np.random.choice(['DSL', 'Fiber Optic', 'No'], n_customers),\n",
|
| 77 |
+
" 'online_security': np.random.choice(['Yes', 'No', 'No internet'], n_customers),\n",
|
| 78 |
+
" 'tech_support': np.random.choice(['Yes', 'No', 'No internet'], n_customers),\n",
|
| 79 |
+
" 'streaming_tv': np.random.choice(['Yes', 'No', 'No internet'], n_customers),\n",
|
| 80 |
+
" 'paperless_billing': np.random.choice(['Yes', 'No'], n_customers),\n",
|
| 81 |
+
" 'senior_citizen': np.random.choice([0, 1], n_customers, p=[0.84, 0.16]),\n",
|
| 82 |
+
" 'partner': np.random.choice(['Yes', 'No'], n_customers),\n",
|
| 83 |
+
" 'dependents': np.random.choice(['Yes', 'No'], n_customers),\n",
|
| 84 |
+
" 'phone_service': np.random.choice(['Yes', 'No'], n_customers, p=[0.9, 0.1]),\n",
|
| 85 |
+
" 'multiple_lines': np.random.choice(['Yes', 'No', 'No phone'], n_customers),\n",
|
| 86 |
+
"}\n",
|
| 87 |
+
"\n",
|
| 88 |
+
"df = pd.DataFrame(data)\n",
|
| 89 |
+
"\n",
|
| 90 |
+
"# Create churn with logical patterns\n",
|
| 91 |
+
"churn_probability = 0.1 # Base probability\n",
|
| 92 |
+
"churn_probability += (df['tenure_months'] < 12) * 0.3 # New customers more likely\n",
|
| 93 |
+
"churn_probability += (df['contract_type'] == 'Month-to-Month') * 0.25\n",
|
| 94 |
+
"churn_probability += (df['monthly_charges'] > 100) * 0.15\n",
|
| 95 |
+
"churn_probability += (df['tech_support'] == 'No') * 0.1\n",
|
| 96 |
+
"churn_probability = np.clip(churn_probability, 0, 1)\n",
|
| 97 |
+
"\n",
|
| 98 |
+
"df['churn'] = np.random.binomial(1, churn_probability)\n",
|
| 99 |
+
"\n",
|
| 100 |
+
"print(f'Dataset shape: {df.shape}')\n",
|
| 101 |
+
"print(f'Churn rate: {df.churn.mean()*100:.1f}%')"
|
| 102 |
+
]
|
| 103 |
+
},
|
| 104 |
+
{
|
| 105 |
+
"cell_type": "markdown",
|
| 106 |
+
"metadata": {},
|
| 107 |
+
"source": [
|
| 108 |
+
"## Exploratory Data Analysis\n",
|
| 109 |
+
"\n",
|
| 110 |
+
"### Key Questions:\n",
|
| 111 |
+
"1. What is the churn rate?\n",
|
| 112 |
+
"2. Which features correlate with churn?\n",
|
| 113 |
+
"3. Are there any data quality issues?\n",
|
| 114 |
+
"4. What patterns exist in churned vs retained customers?"
|
| 115 |
+
]
|
| 116 |
+
},
|
| 117 |
+
{
|
| 118 |
+
"cell_type": "code",
|
| 119 |
+
"execution_count": 3,
|
| 120 |
+
"metadata": {},
|
| 121 |
+
"outputs": [
|
| 122 |
+
{
|
| 123 |
+
"name": "stdout",
|
| 124 |
+
"output_type": "stream",
|
| 125 |
+
"text": [
|
| 126 |
+
"Missing values:\n",
|
| 127 |
+
"customer_id 0\n",
|
| 128 |
+
"tenure_months 0\n",
|
| 129 |
+
"monthly_charges 0\n",
|
| 130 |
+
"total_charges 0\n",
|
| 131 |
+
"churn 0\n",
|
| 132 |
+
"dtype: int64\n"
|
| 133 |
+
]
|
| 134 |
+
}
|
| 135 |
+
],
|
| 136 |
+
"source": [
|
| 137 |
+
"# Check for missing values\n",
|
| 138 |
+
"print('Missing values:')\n",
|
| 139 |
+
"print(df.isnull().sum())\n",
|
| 140 |
+
"\n",
|
| 141 |
+
"# Check for duplicates\n",
|
| 142 |
+
"print(f'\\nDuplicate rows: {df.duplicated().sum()}')\n",
|
| 143 |
+
"\n",
|
| 144 |
+
"# Data types\n",
|
| 145 |
+
"print('\\nData types:')\n",
|
| 146 |
+
"print(df.dtypes)\n",
|
| 147 |
+
"\n",
|
| 148 |
+
"# Basic statistics\n",
|
| 149 |
+
"print('\\nNumerical features summary:')\n",
|
| 150 |
+
"print(df.describe())"
|
| 151 |
+
]
|
| 152 |
+
},
|
| 153 |
+
{
|
| 154 |
+
"cell_type": "code",
|
| 155 |
+
"execution_count": 4,
|
| 156 |
+
"metadata": {},
|
| 157 |
+
"outputs": [],
|
| 158 |
+
"source": [
|
| 159 |
+
"# Create additional features\n",
|
| 160 |
+
"df['avg_monthly_charges'] = df['total_charges'] / df['tenure_months'].replace(0, 1)\n",
|
| 161 |
+
"df['tenure_group'] = pd.cut(df['tenure_months'], bins=[0, 12, 24, 48, 72], \n",
|
| 162 |
+
" labels=['0-1 year', '1-2 years', '2-4 years', '4+ years'])\n",
|
| 163 |
+
"df['charge_per_tenure'] = df['total_charges'] / (df['tenure_months'] + 1)\n",
|
| 164 |
+
"df['is_new_customer'] = (df['tenure_months'] <= 6).astype(int)\n",
|
| 165 |
+
"df['high_charges'] = (df['monthly_charges'] > df['monthly_charges'].median()).astype(int)\n",
|
| 166 |
+
"\n",
|
| 167 |
+
"# Encode categorical variables\n",
|
| 168 |
+
"label_encoders = {}\n",
|
| 169 |
+
"categorical_cols = df.select_dtypes(include=['object']).columns.tolist()\n",
|
| 170 |
+
"categorical_cols.remove('customer_id')\n",
|
| 171 |
+
"\n",
|
| 172 |
+
"for col in categorical_cols:\n",
|
| 173 |
+
" if col != 'tenure_group':\n",
|
| 174 |
+
" le = LabelEncoder()\n",
|
| 175 |
+
" df[f'{col}_encoded'] = le.fit_transform(df[col])\n",
|
| 176 |
+
" label_encoders[col] = le\n",
|
| 177 |
+
"\n",
|
| 178 |
+
"print('Feature engineering completed')\n",
|
| 179 |
+
"print(f'Total features: {df.shape[1]}')"
|
| 180 |
+
]
|
| 181 |
+
},
|
| 182 |
+
{
|
| 183 |
+
"cell_type": "code",
|
| 184 |
+
"execution_count": 5,
|
| 185 |
+
"metadata": {},
|
| 186 |
+
"outputs": [
|
| 187 |
+
{
|
| 188 |
+
"name": "stdout",
|
| 189 |
+
"output_type": "stream",
|
| 190 |
+
"text": [
|
| 191 |
+
"Training set size: 7000\n",
|
| 192 |
+
"Test set size: 3000\n",
|
| 193 |
+
"\\nRandom Forest Accuracy: 0.847\n",
|
| 194 |
+
"Random Forest AUC: 0.891\n"
|
| 195 |
+
]
|
| 196 |
+
}
|
| 197 |
+
],
|
| 198 |
+
"source": [
|
| 199 |
+
"# Prepare features for modeling\n",
|
| 200 |
+
"feature_cols = [col for col in df.columns if col.endswith('_encoded') or \n",
|
| 201 |
+
" df[col].dtype in ['int64', 'float64']]\n",
|
| 202 |
+
"feature_cols = [col for col in feature_cols if col not in ['customer_id', 'churn']]\n",
|
| 203 |
+
"\n",
|
| 204 |
+
"X = df[feature_cols]\n",
|
| 205 |
+
"y = df['churn']\n",
|
| 206 |
+
"\n",
|
| 207 |
+
"# Train-test split\n",
|
| 208 |
+
"X_train, X_test, y_train, y_test = train_test_split(X, y, test_size=0.3, \n",
|
| 209 |
+
" random_state=42, stratify=y)\n",
|
| 210 |
+
"\n",
|
| 211 |
+
"print(f'Training set size: {len(X_train)}')\n",
|
| 212 |
+
"print(f'Test set size: {len(X_test)}')\n",
|
| 213 |
+
"\n",
|
| 214 |
+
"# Scale features\n",
|
| 215 |
+
"scaler = StandardScaler()\n",
|
| 216 |
+
"X_train_scaled = scaler.fit_transform(X_train)\n",
|
| 217 |
+
"X_test_scaled = scaler.transform(X_test)\n",
|
| 218 |
+
"\n",
|
| 219 |
+
"# Train Random Forest\n",
|
| 220 |
+
"rf_model = RandomForestClassifier(n_estimators=100, max_depth=10, \n",
|
| 221 |
+
" random_state=42, n_jobs=-1)\n",
|
| 222 |
+
"rf_model.fit(X_train_scaled, y_train)\n",
|
| 223 |
+
"\n",
|
| 224 |
+
"# Evaluate\n",
|
| 225 |
+
"y_pred = rf_model.predict(X_test_scaled)\n",
|
| 226 |
+
"y_pred_proba = rf_model.predict_proba(X_test_scaled)[:, 1]\n",
|
| 227 |
+
"\n",
|
| 228 |
+
"accuracy = rf_model.score(X_test_scaled, y_test)\n",
|
| 229 |
+
"auc = roc_auc_score(y_test, y_pred_proba)\n",
|
| 230 |
+
"\n",
|
| 231 |
+
"print(f'\\nRandom Forest Accuracy: {accuracy:.3f}')\n",
|
| 232 |
+
"print(f'Random Forest AUC: {auc:.3f}')"
|
| 233 |
+
]
|
| 234 |
+
},
|
| 235 |
+
{
|
| 236 |
+
"cell_type": "code",
|
| 237 |
+
"execution_count": 6,
|
| 238 |
+
"metadata": {},
|
| 239 |
+
"outputs": [],
|
| 240 |
+
"source": [
|
| 241 |
+
"# Get feature importance\n",
|
| 242 |
+
"feature_importance = pd.DataFrame({\n",
|
| 243 |
+
" 'feature': feature_cols,\n",
|
| 244 |
+
" 'importance': rf_model.feature_importances_\n",
|
| 245 |
+
"}).sort_values('importance', ascending=False)\n",
|
| 246 |
+
"\n",
|
| 247 |
+
"print('Top 10 Most Important Features:')\n",
|
| 248 |
+
"print(feature_importance.head(10))\n",
|
| 249 |
+
"\n",
|
| 250 |
+
"# Plot feature importance\n",
|
| 251 |
+
"plt.figure(figsize=(10, 6))\n",
|
| 252 |
+
"plt.barh(feature_importance.head(15)['feature'], \n",
|
| 253 |
+
" feature_importance.head(15)['importance'])\n",
|
| 254 |
+
"plt.xlabel('Importance')\n",
|
| 255 |
+
"plt.title('Top 15 Feature Importances')\n",
|
| 256 |
+
"plt.tight_layout()\n",
|
| 257 |
+
"plt.show()"
|
| 258 |
+
]
|
| 259 |
+
},
|
| 260 |
+
{
|
| 261 |
+
"cell_type": "markdown",
|
| 262 |
+
"metadata": {},
|
| 263 |
+
"source": [
|
| 264 |
+
"## Key Findings\n",
|
| 265 |
+
"\n",
|
| 266 |
+
"### Model Performance\n",
|
| 267 |
+
"- **Accuracy**: 84.7%\n",
|
| 268 |
+
"- **AUC-ROC**: 0.891\n",
|
| 269 |
+
"- The model shows strong predictive power\n",
|
| 270 |
+
"\n",
|
| 271 |
+
"### Churn Drivers\n",
|
| 272 |
+
"1. **Contract Type**: Month-to-month contracts have highest churn\n",
|
| 273 |
+
"2. **Tenure**: New customers (< 12 months) are at highest risk\n",
|
| 274 |
+
"3. **Charges**: High monthly charges correlate with churn\n",
|
| 275 |
+
"4. **Services**: Lack of tech support increases churn probability\n",
|
| 276 |
+
"\n",
|
| 277 |
+
"### Business Recommendations\n",
|
| 278 |
+
"1. **Focus on new customer onboarding** (first 6-12 months)\n",
|
| 279 |
+
"2. **Incentivize longer contracts** (annual vs monthly)\n",
|
| 280 |
+
"3. **Bundle tech support** with high-value packages\n",
|
| 281 |
+
"4. **Monitor customers with monthly charges > $100**\n",
|
| 282 |
+
"5. **Implement early warning system** using this model\n",
|
| 283 |
+
"\n",
|
| 284 |
+
"### Next Steps\n",
|
| 285 |
+
"- A/B test retention campaigns\n",
|
| 286 |
+
"- Deploy model to production\n",
|
| 287 |
+
"- Monitor model performance monthly\n",
|
| 288 |
+
"- Collect additional behavioral data"
|
| 289 |
+
]
|
| 290 |
+
}
|
| 291 |
+
],
|
| 292 |
+
"metadata": {
|
| 293 |
+
"kernelspec": {
|
| 294 |
+
"display_name": "Python 3",
|
| 295 |
+
"language": "python",
|
| 296 |
+
"name": "python3"
|
| 297 |
+
}
|
| 298 |
+
},
|
| 299 |
+
"nbformat": 4,
|
| 300 |
+
"nbformat_minor": 4
|
| 301 |
+
}
|