A Segmented Machine Learning Approach to Predicting and Mitigating Churn in the Gig Economy

The highly competitive nature of the online food delivery (OFD) market faces a serious retention problem, with acquiring new users typically being much more expensive than retaining existing users. Traditional prediction methods that rely primarily upon static transactional metrics such as recency and frequency are often unable to capture the psychological ‘disconfirmation’ which occurs prior to churn. To fill this gap, this study proposes a framework based on Expectation-Confirmation Theory (ECT). Unsupervised K-Means clustering was employed to classify a simulated and filtered dataset with 1500 customer records containing behaviour, geography, etc. This framework also couples sentiment analysis from BERT, allowing it to identify psychological “silent” attrition. Heterogeneous cohorts, which exhibit different psychological antecedents (utilitarian versus hedonic), were identified. The empirical results of our analyses demonstrated that Random Forest Classifiers with segment-specific features outperform baseline transactional models (F1 = 0.76) with an F1 Score of 0.89. The visual analytic interface developed provides a holistic view of the consumption process than traditional prediction models, including prescriptive, automated segment-based mitigation strategies. Our findings contradict the assumption that the “frequency–loyalty” model applies to all users. High-frequency discretionary users are found to be elastic in terms of retention and will experience significant churn. By utilising the automated action log, managers can plan targeted, highly efficient retention strategies rather than blanket discounting approaches.