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Segmentation and classification customer payment behavior at multimedia service provider company with K-Means and C4.5 algorithm

This research use model with join k-means segmentation and C4.5 classification algorithm because C4.5 weaknesses in difficulty to choose attributes. Be proven that extract customer potential attributes with k-means can help to increase C4.5 classification algorithm’s accuracy. This thing proved from the model accuracy increment from 59.02% to 77.31% and AUC from 0.537 to 0.836. Customer potential level can also be the reference in promotion, retention, and prevention of insolvency customer. | International Journal of Computer Networks and Communications Security VOL. 4, NO. 9, SEPTEMBER 2016, 265–275 Available online at: www.ijcncs.org E-ISSN 2308-9830 (Online) / ISSN 2410-0595 (Print) Segmentation and Classification Customer Payment Behavior at Multimedia Service Provider Company with K-Means and C4.5 Algorithm Sardjoeni Moedjiono1, Fanny Fransisca2 and Aries Kusdaryono3 1, 2, 3 Master of Computer Science, Budi Luhur University, Jakarta, Indonesia 1 moedjiono@gmail.com, 2stelovfan@gmail.com, 3aries.kusdaryono@gmail.com ABSTRACT Multimedia internet and television (tv) cabel service provider companies get problem with customer who refuse to pay after using the service. It’s hard to identify solvency customer because service provider companies do not do customer finance verification. This research use model with join k-means segmentation and C4.5 classification algorithm because C4.5 weaknesses in difficulty to choose attributes. Be proven that extract customer potential attributes with k-means can help to increase C4.5 classification algorithm’s accuracy. This thing proved from the model accuracy increment from 59.02% to 77.31% and AUC from 0.537 to 0.836. Customer potential level can also be the reference in promotion, retention, and prevention of insolvency customer. Keywords: Customer loyalty, C4.5 Algorithm, K-means Algorithm, Multimedia Company, Data Mining. 1 INTRODUCTION Multimedia service provider company often has a problem with customers who refuse to pay for the service they used [4]. Different with bank or Loan Company, postpaid service companies often gives their services to customer without detail verification, so it’s hard to know who is solvency customer and who is insolvency customer [11]. Therefore the customer who is refused to pay caused a debt and decreased the income. Service’s company has a regulation to keep giving the service to customers who refuse to pay in specific period [12]. Although there is penalty which will be .