文档介绍：David A. Schweidel, Peter S. Fader, & Eric T. Bradlow
Understanding Service Retention
Within and Across Cohorts Using
Limited Information
Service churn and retention rates remain central as constructs in marketing activities, such as valuation of service
subscribers and resource allocation. Although extant approaches have been proposed to relate service churn to
external factors, such as reported satisfaction, marketing-mix activities, and so on, managers often face situations
in which the only information available is the duration for which subscribers have had service. In such cases, can
they forecast service churn and understand the contributing factors, which may allow for subsequent intervention?
The authors propose a framework to examine factors that may underlie service retention in a contractual setting.
Specifically, they use a model of retention that accounts for (1) duration dependence, (2) promotional effects, (3)
subscriber heterogeneity, (4) cross-cohort effects, and (5) calendar-time effects (., seasonality). Then, they apply
the framework to subscription databases of seven services offered by a munications provider, mirroring the
monly used to forecast future service churn (and to make managerial decisions). Across all seven
services, the inclusion of promotional effects always improves the forecast accuracy of retention behavior, whereas
including cross-cohort effects does not significantly improve it. In five of the services, customer heterogeneity,
calendar-time effects, and duration dependence also contribute to improved forecasts. The authors use these
results to understand how the expected value of a subscription differs across model specifications. They find
considerable variation across model specifications, indicating that model misspecification can affect resource
allocation decisions and other marketing efforts that are important to a firm.
Keywords: service retention, proportional hazards model, valuation
etent