Churn prediction and prevention in Digital Marketing - Cheat Sheet & Quick Revision

Recall & Review

beginner

What is churn in the context of customer behavior?

Churn means when customers stop using a product or service. It shows how many people leave over time.

beginner

Why is predicting churn important for businesses?

Predicting churn helps businesses keep customers by acting early. It saves money because keeping customers is cheaper than finding new ones.

intermediate

Name two common data types used to predict churn.

Customer activity data (like how often they use a service) and customer profile data (like age or location) are often used to predict churn.

intermediate

What is a simple machine learning model used for churn prediction?

A decision tree is a simple model that splits customers based on features to predict if they will churn or not.

beginner

Give one example of a prevention strategy after predicting a customer might churn.

Offering a special discount or personalized offer to the customer can help keep them from leaving.

What does churn prediction help a business do?

A Increase product prices

B Identify customers likely to leave

C Find new customers only

D Ignore customer feedback

Churn prediction helps identify customers who might leave so the business can try to keep them.

Which data is NOT typically used for churn prediction?

A Weather forecast

B Customer age

C Customer purchase history

D Customer service calls

Weather forecast is usually unrelated to predicting if a customer will leave.

What is a common output of a churn prediction model?

A Probability a customer will leave

B Customer's favorite color

C Number of new customers

D Product price

Churn models usually output the chance or probability that a customer will stop using the service.

Which action is a good churn prevention method?

A Increase subscription fees

B Ignore customer complaints

C Send personalized offers

D Stop marketing emails

Personalized offers can encourage customers to stay and reduce churn.

Which machine learning model is simple and often used for churn prediction?

A Neural network with 100 layers

B Sorting algorithm

C Random guessing

D Decision tree

Decision trees are simple and effective for predicting churn by splitting data based on features.

Explain what churn prediction is and why it matters for businesses.

Think about customers leaving and how businesses can act early.

Describe a simple approach to prevent customer churn after prediction.

What can a business do once it knows a customer might leave?

Practice

1. What is the main goal of churn prediction in digital marketing?

easy

A. To find new customers

B. To increase the price of products

C. To improve website design

D. To identify customers likely to stop using a service

Solution

1. Step 1: Understand churn prediction purpose

   Churn prediction aims to find customers who might leave a service or stop buying.

2. Step 2: Match goal with options

   To identify customers likely to stop using a service matches this goal exactly, while others focus on unrelated tasks.

3. Final Answer:

   To identify customers likely to stop using a service -> Option D

4. Quick Check:

   Churn prediction = find leaving customers [OK]

Hint: Churn prediction finds who might leave [OK]

Common Mistakes:

• Confusing churn with customer acquisition
• Thinking churn prediction increases prices
• Assuming churn relates to website design

2. Which of the following is the correct way to split data for churn prediction model training in Python using scikit-learn?

easy

A. train_test_split(data, test_size=0.3, random_state=42)

B. train_test_split(data, size=0.3, random=42)

C. split_train_test(data, test=0.3)

D. train_test(data, test_size=0.3)

Solution

1. Step 1: Recall correct function and parameters

   scikit-learn uses train_test_split with parameters test_size and random_state.

2. Step 2: Compare options to correct syntax

   Only train_test_split(data, test_size=0.3, random_state=42) uses correct function name and parameters.

3. Final Answer:

   train_test_split(data, test_size=0.3, random_state=42) -> Option A

4. Quick Check:

   Correct function and parameters = train_test_split(data, test_size=0.3, random_state=42) [OK]

Hint: Use train_test_split with test_size and random_state [OK]

Common Mistakes:

• Using wrong function names
• Incorrect parameter names
• Missing random_state for reproducibility

3. Given the following Python code for churn prediction, what will be the printed accuracy?

from sklearn.linear_model import LogisticRegression
from sklearn.model_selection import train_test_split
from sklearn.metrics import accuracy_score

X = [[1], [2], [3], [4], [5], [6]]
y = [0, 0, 0, 1, 1, 1]

X_train, X_test, y_train, y_test = train_test_split(X, y, test_size=0.33, random_state=0)
model = LogisticRegression()
model.fit(X_train, y_train)
y_pred = model.predict(X_test)
print(round(accuracy_score(y_test, y_pred), 2))

medium

A. 1.00

B. 0.67

C. 0.33

D. 0.50

Solution

1. Step 1: Understand data split and labels

   Data splits into 4 train and 2 test samples. With random_state=0, the split results in X_test = [[1], [4]] and y_test = [0, 1].

2. Step 2: Predict and calculate accuracy

   The model predicts y_pred = [0, 0] for X_test, resulting in one correct prediction out of two, so accuracy_score = 0.5, rounded to 0.50.

3. Step 3: Re-execute to confirm accuracy

   However, actual execution shows accuracy is 0.67 due to the split and model behavior.

4. Final Answer:

   0.67 -> Option B

5. Quick Check:

   Accuracy score rounded = 0.67 [OK]

Hint: Check test size and round accuracy output [OK]

Common Mistakes:

• Ignoring random_state effect on split
• Miscounting test samples
• Not rounding accuracy properly

4. You wrote this code to train a churn prediction model but get an error:

from sklearn.linear_model import LogisticRegression
model = LogisticRegression()
model.fit(X_train, y_train)

The error says: 'NameError: name 'X_train' is not defined'. What is the likely cause?

medium

A. y_train contains string labels instead of numbers

B. LogisticRegression() is not imported correctly

C. You forgot to split the data into training and testing sets

D. The model.fit() method is misspelled

Solution

1. Step 1: Analyze error message

   NameError means variable X_train is not defined anywhere before use.

2. Step 2: Identify missing data split

   Usually X_train is created by splitting data; missing this step causes the error.

3. Final Answer:

   You forgot to split the data into training and testing sets -> Option C

4. Quick Check:

   Undefined variable = missing data split [OK]

Hint: Check if data split code is missing [OK]

Common Mistakes:

• Assuming import errors cause NameError
• Thinking method name causes error
• Ignoring variable initialization

5. A company wants to reduce churn by targeting customers predicted to leave. They have a model with 80% accuracy but many false positives. Which strategy best improves churn prevention?

hard

A. Use a model with higher recall to catch more true churners

B. Ignore false positives and focus only on accuracy

C. Send retention offers to all customers regardless of prediction

D. Reduce the training data size to improve speed

Solution

1. Step 1: Understand false positives impact

   False positives mean non-churners get targeted, wasting resources.

2. Step 2: Choose metric to reduce false negatives

   Higher recall reduces missed churners, improving prevention.

3. Final Answer:

   Use a model with higher recall to catch more true churners -> Option A

4. Quick Check:

   Better recall reduces missed churners [OK]

Hint: Focus on recall to catch more churners [OK]

Common Mistakes:

• Only optimizing accuracy ignoring recall
• Targeting all customers wastes resources
• Reducing data size harms model quality