FROM HAZARD TO SURVIVAL
 

 

 

 

 

 

 

 

 

 

 

 

 

These two customers were forced to leave, so they are censored at the point of attrition instead of being considered stopped. All the data from before they left is included in the calculation of the hazard functions for voluntary attrition — since this they remained as customers before then. From Hazards to Survival This chapter started with a discussion of retention curves. From the hazard functions, it is possible to create a very similar curve, called the survival curve. The survival curve is more useful and in many senses more accurate. Retention A retention curve provides information about how many customers have been retained for a certain amount of time. One common way of creating a retention curve is to do the following: For customers who started 1 week ago, measure the 1-week retention. For customers who started 2 weeks ago, measure the 2-week retention.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actually, it is more than odd, it violates the very idea notion of retention. For instance, it opens the possibility that the curve will cross the 50 percent thresh­ old more than once, leading to the odd, and inaccurate, conclusion that there is more than one median lifetime, or that the average retention for customers during the first 10 weeks after they start might be more than the average for the first 9 weeks. What is happening? Are customers being reincarnated? These problems are an artifact of the way the curve was created. Cus­ tomers acquired in any given time period may be better or worse than the customers acquired in other time periods. For instance, perhaps 9 weeks ago there was a special pricing offer that brought in bad customers. Customers who started 10 weeks ago were the usual mix of good and bad, but those who started 9 weeks ago were particularly bad. So, there are fewer of the bad cus­ tomers after 9 weeks than of the better customers after 10 weeks. The quality of customers might also vary due merely to random varia­ tion. After all, in the previous figure, there are over 100 time periods being considered—so, all things being equal, some time periods would be expected to exhibit differences.