'How to choose the best duration to churn? E.g., this customer will churn within a month
The result would be something similar to:
- Customer xxx will churn within n months/weeks.
My data:
- Business data about each client [company type, country, contract type, etc.]
- Activity data [when they did some activities related to the service...].
- A column that shows if they are churned or if they are still active.
My questions are:
a) How can I calculate a good duration for churn? E.g., is a week before they churn is good, or should it be longer? Is there a formula to calculate this?
b) How do I prepare my data for the chosen duration? E.g., if we want a month of churn [probability of the customer xxx churn within the next month], should I use the activity data up until last month? In other words, should I exclude last month's activity data in my model?
I'm going to use a random forest model for this task.
Sources
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