An autonomous mixed data oversampling method for AIOT-based churn recognition and personalized recommendations using behavioral segmentation

Abstract

The telecom sector is currently undergoing a digital transformation by integrating artificial intelligence (AI) and Internet of Things (IoT) technologies. Customer retention in this context relies on the application of autonomous AI methods for analyzing IoT device data patterns in relation to the offered service packages. One significant challenge in existing studies is treating churn recognition and customer segmentation as separate tasks, which diminishes overall system accuracy. This study introduces an innovative approach by leveraging a unified customer analytics platform that treats churn recognition and segmentation as a bi-level optimization problem. The proposed framework includes an Auto Machine Learning (AutoML) oversampling method, effectively handling three mixed datasets of customer churn features while addressing imbalanced-class distribution issues. To enhance performance, the study utilizes the strength of oversampling methods like synthetic minority oversampling technique for nominal and continuous features (SMOTE-NC) and synthetic minority oversampling with encoded nominal and continuous features (SMOTE-ENC). Performance evaluation, using 10-fold cross-validation, measures accuracy and F1-score. Simulation results demonstrate that the proposed strategy, particularly Random Forest (RF) with SMOTE-NC, outperforms standard methods with SMOTE. It achieves accuracy rates of 79.24%, 94.54%, and 69.57%, and F1-scores of 65.25%, 81.87%, and 45.62% for the IBM, Kaggle Telco and Cell2Cell datasets, respectively. The proposed method autonomously determines the number and density of clusters. Factor analysis employing Bayesian logistic regression identifies influential factors for accurate customer segmentation. Furthermore, the study segments consumers behaviorally and generates targeted recommendations for personalized service packages, benefiting decision-makers.