Social networks have always been with us, of course, but now they’ve gained concrete reality in the online fabric of modern life.

Social network analysis has, in a real sense, been with us almost as long as we’ve been doing predictive analytics. Customer churn analysis is the killer app for predictive analytics, and it is inherently social. It’s long been known that individual customers don’t always churn themselves—i.e., decide to renew and/or bolt to the competition—in isolation. As they run the continual calculus called loyalty in their heads and hearts, they’re receiving fresh feeds of opinion from their friends and families, following the leads of peers and influencers, and keeping their fingers to the cultural breeze. You could also make a strong case for social networking—i.e., individual behaviors spurred, shaped, and encouraged within communities—as a key independent variable driving cross-sell, up-sell, fraud, and other phenomena for which we’ve long built predictive models.

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