Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda

Diane Ingabire; Samuel Musili Mwalili; George Otieno Orwa

doi:doi:10.11648/j.ajtas.20150406.17

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Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda

Diane Ingabire, Samuel Musili Mwalili, George Otieno Orwa

Published in American Journal of Theoretical and Applied Statistics (Volume 4, Issue 6)

Received: 25 August 2015 Accepted: 15 September 2015 Published: 13 October 2015

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Abstract

Retaining customers improves profitability, importantly reduces the cost incurred in acquiring new customers and moreover a firm can increase profits by 25-95 percent if it could improve its customer retention rates by 5 percent. As markets mature and competitive pressure intensifies, companies can no longer ignore the importance of customer retention as their existing customer bases have become their precious assets. This research aims to model customer retention in Rwandan telecom sector using survival analysis technique in order to inform the concerned institutions and companies about telecom customer retention in Rwanda. The Cox regression model and extended Cox model were developed using simulation approach in order to assess which model is the best for customer retention. It was found that the customer’s socio-economic, demographic and behavioral characteristics have an effect on churn rate. The extended Cox model was the best description of how customer retention is achieved. These findings hold implications for industry operators on key areas to pay attention to in order to achieve customer retention.

Published in	American Journal of Theoretical and Applied Statistics (Volume 4, Issue 6)
DOI	10.11648/j.ajtas.20150406.17
Page(s)	471-479
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Customer retention, Cox model, Extended Cox Model

References

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[10]	Ocloo, C. E. & Tsetse, E. K. (2013), ‘Customer retention in the ghanaian mobile telecommunication industry’, European Journal of Business and Social Sciences 2(7), 136–160.
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[19]	Wong, K. K.-K. (2011), ‘Using Cox regression to model customer time to churn in the wireless telecommunications industry’, Journal of Targeting, Measurement and Analysis for Marketing 19(1), 37–43.

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APA Style

Diane Ingabire, Samuel Musili Mwalili, George Otieno Orwa. (2015). Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda. American Journal of Theoretical and Applied Statistics, 4(6), 471-479. https://doi.org/10.11648/j.ajtas.20150406.17

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ACS Style

Diane Ingabire; Samuel Musili Mwalili; George Otieno Orwa. Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda. Am. J. Theor. Appl. Stat. 2015, 4(6), 471-479. doi: 10.11648/j.ajtas.20150406.17

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AMA Style

Diane Ingabire, Samuel Musili Mwalili, George Otieno Orwa. Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda. Am J Theor Appl Stat. 2015;4(6):471-479. doi: 10.11648/j.ajtas.20150406.17

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@article{10.11648/j.ajtas.20150406.17,
  author = {Diane Ingabire and Samuel Musili Mwalili and George Otieno Orwa},
  title = {Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {4},
  number = {6},
  pages = {471-479},
  doi = {10.11648/j.ajtas.20150406.17},
  url = {https://doi.org/10.11648/j.ajtas.20150406.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20150406.17},
  abstract = {Retaining customers improves profitability, importantly reduces the cost incurred in acquiring new customers and moreover a firm can increase profits by 25-95 percent if it could improve its customer retention rates by 5 percent. As markets mature and competitive pressure intensifies, companies can no longer ignore the importance of customer retention as their existing customer bases have become their precious assets. This research aims to model customer retention in Rwandan telecom sector using survival analysis technique in order to inform the concerned institutions and companies about telecom customer retention in Rwanda. The Cox regression model and extended Cox model were developed using simulation approach in order to assess which model is the best for customer retention. It was found that the customer’s socio-economic, demographic and behavioral characteristics have an effect on churn rate. The extended Cox model was the best description of how customer retention is achieved. These findings hold implications for industry operators on key areas to pay attention to in order to achieve customer retention.},
 year = {2015}
}

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TY  - JOUR
T1  - Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda
AU  - Diane Ingabire
AU  - Samuel Musili Mwalili
AU  - George Otieno Orwa
Y1  - 2015/10/13
PY  - 2015
N1  - https://doi.org/10.11648/j.ajtas.20150406.17
DO  - 10.11648/j.ajtas.20150406.17
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 471
EP  - 479
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20150406.17
AB  - Retaining customers improves profitability, importantly reduces the cost incurred in acquiring new customers and moreover a firm can increase profits by 25-95 percent if it could improve its customer retention rates by 5 percent. As markets mature and competitive pressure intensifies, companies can no longer ignore the importance of customer retention as their existing customer bases have become their precious assets. This research aims to model customer retention in Rwandan telecom sector using survival analysis technique in order to inform the concerned institutions and companies about telecom customer retention in Rwanda. The Cox regression model and extended Cox model were developed using simulation approach in order to assess which model is the best for customer retention. It was found that the customer’s socio-economic, demographic and behavioral characteristics have an effect on churn rate. The extended Cox model was the best description of how customer retention is achieved. These findings hold implications for industry operators on key areas to pay attention to in order to achieve customer retention.
VL  - 4
IS  - 6
ER  -

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Author Information

Diane Ingabire

Department of Statistics and Actuarial Sciences, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
Samuel Musili Mwalili

Department of Statistics and Actuarial Sciences, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
George Otieno Orwa

Department of Statistics and Actuarial Sciences, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya

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APA Style

Diane Ingabire, Samuel Musili Mwalili, George Otieno Orwa. (2015). Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda. American Journal of Theoretical and Applied Statistics, 4(6), 471-479. https://doi.org/10.11648/j.ajtas.20150406.17

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ACS Style

Diane Ingabire; Samuel Musili Mwalili; George Otieno Orwa. Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda. Am. J. Theor. Appl. Stat. 2015, 4(6), 471-479. doi: 10.11648/j.ajtas.20150406.17

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AMA Style

Diane Ingabire, Samuel Musili Mwalili, George Otieno Orwa. Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda. Am J Theor Appl Stat. 2015;4(6):471-479. doi: 10.11648/j.ajtas.20150406.17

Copy | Download

@article{10.11648/j.ajtas.20150406.17,
  author = {Diane Ingabire and Samuel Musili Mwalili and George Otieno Orwa},
  title = {Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda},
  journal = {American Journal of Theoretical and Applied Statistics},
  volume = {4},
  number = {6},
  pages = {471-479},
  doi = {10.11648/j.ajtas.20150406.17},
  url = {https://doi.org/10.11648/j.ajtas.20150406.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20150406.17},
  abstract = {Retaining customers improves profitability, importantly reduces the cost incurred in acquiring new customers and moreover a firm can increase profits by 25-95 percent if it could improve its customer retention rates by 5 percent. As markets mature and competitive pressure intensifies, companies can no longer ignore the importance of customer retention as their existing customer bases have become their precious assets. This research aims to model customer retention in Rwandan telecom sector using survival analysis technique in order to inform the concerned institutions and companies about telecom customer retention in Rwanda. The Cox regression model and extended Cox model were developed using simulation approach in order to assess which model is the best for customer retention. It was found that the customer’s socio-economic, demographic and behavioral characteristics have an effect on churn rate. The extended Cox model was the best description of how customer retention is achieved. These findings hold implications for industry operators on key areas to pay attention to in order to achieve customer retention.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - Extended Cox Modeling of Customer Retention in Mobile Telecommunication Sector of Rwanda
AU  - Diane Ingabire
AU  - Samuel Musili Mwalili
AU  - George Otieno Orwa
Y1  - 2015/10/13
PY  - 2015
N1  - https://doi.org/10.11648/j.ajtas.20150406.17
DO  - 10.11648/j.ajtas.20150406.17
T2  - American Journal of Theoretical and Applied Statistics
JF  - American Journal of Theoretical and Applied Statistics
JO  - American Journal of Theoretical and Applied Statistics
SP  - 471
EP  - 479
PB  - Science Publishing Group
SN  - 2326-9006
UR  - https://doi.org/10.11648/j.ajtas.20150406.17
AB  - Retaining customers improves profitability, importantly reduces the cost incurred in acquiring new customers and moreover a firm can increase profits by 25-95 percent if it could improve its customer retention rates by 5 percent. As markets mature and competitive pressure intensifies, companies can no longer ignore the importance of customer retention as their existing customer bases have become their precious assets. This research aims to model customer retention in Rwandan telecom sector using survival analysis technique in order to inform the concerned institutions and companies about telecom customer retention in Rwanda. The Cox regression model and extended Cox model were developed using simulation approach in order to assess which model is the best for customer retention. It was found that the customer’s socio-economic, demographic and behavioral characteristics have an effect on churn rate. The extended Cox model was the best description of how customer retention is achieved. These findings hold implications for industry operators on key areas to pay attention to in order to achieve customer retention.
VL  - 4
IS  - 6
ER  -

Copy | Download