Customer Churn Analysis

On This Page

• C6.1  Project Overview
• C6.2  Business Problem
• C6.3  Dataset Description
• C6.4  Objectives
• C6.5  Step-by-Step Solution
• C6.6  Complete Python Code
• C6.7  Expected Output
• C6.8  Visualizations
• C6.9  Key Insights
• C6.10  Business Recommendations

Capstone Project 6: Customer Churn Analysis

C6.1  Project Overview

This project analyzes a subscription business's customer data to understand why customers churn (cancel), and which subscription plans are most at risk.

C6.2  Business Problem

A subscription company is losing customers and wants to understand which factors — tenure, plan type — are linked to churn, so they can take targeted retention action.

C6.3  Dataset Description

Sample scope: 400 customer records from the last 12 months.

C6.4  Objectives

• Calculate the overall customer churn rate
• Compare tenure between churned and retained customers
• Identify which subscription plan has the highest churn rate
• Recommend retention strategies based on findings

C6.5  Step-by-Step Solution

• Step 1: Load the customer churn CSV into Pandas
• Step 2: Clean missing values and check data types
• Step 3: Calculate the overall churn rate
• Step 4: Compare tenure distributions for churned vs retained customers using a box plot
• Step 5: Calculate churn rate by subscription plan
• Step 6: Summarize retention-focused recommendations

C6.6  Complete Python Code

import pandas as pd
import seaborn as sns
import matplotlib.pyplot as plt

df = pd.read_csv("customer_churn.csv")
df = df.dropna(subset=['churned'])

churn_rate = (df['churned']=='Yes').mean() * 100
print(f"Overall Churn Rate: {churn_rate:.1f}%")

churn_by_plan = df.groupby('plan').apply(lambda x: (x['churned']=='Yes').mean()*100)
print("Churn Rate by Plan:\n", churn_by_plan.round(1))

sns.boxplot(data=df, x="churned", y="tenure_months")
plt.title("Tenure: Churned vs Retained")
plt.savefig("tenure_box.png")

C6.7  Expected Output

C6.8  Visualizations

C6.9  Key Insights

• Overall churn rate stands at 27% — a meaningfully high figure worth immediate attention.
• Churned customers have a much shorter median tenure than retained ones — most churn happens early in the customer lifecycle, not after long-term use.
• The Basic plan shows the highest churn rate (35%) compared to Premium (15%) — cheaper plans are attracting less committed, higher-risk customers.

C6.10  Business Recommendations

• Launch a structured onboarding/engagement program targeting the first 3 months, since this is clearly the highest-risk churn window.
• Introduce loyalty incentives specifically for Basic plan subscribers to bridge them toward longer-term retention before the typical churn point.
• Consider a mid-tier upgrade nudge campaign — moving Basic users to Standard could meaningfully cut overall churn given the plan-level pattern observed.