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Activity Number:
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540
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Type:
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Contributed
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Date/Time:
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Thursday, August 10, 2006 : 10:30 AM to 12:20 PM
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Sponsor:
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Section on Statistics and Marketing
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| Abstract - #307325 |
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Title:
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Churn Modeling in a Noncontractual Setting
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Author(s):
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Enping Mai*+ and Raja Velu
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Companies:
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Syracuse University and Syracuse University
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Address:
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311 Whitman School of Management, Syracuse, NY, 13244,
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Keywords:
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churn ; profitable customers ; non-contractual setting
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Abstract:
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With customers churning at an average monthly rate of 2% across the United States, many firms are losing substantial amounts of money. However, not all customers are profitable. Therefore, identifying when a profitable customer is churning is very important to firms and database analysis is a key strategic tool to accomplish that goal. In this paper, we review various models of churn and develop a predictive model of the churn time of profitable customers in a non-contractual setting that incorporates customer heterogeneity. Transactional data along with customer demographics are used to demonstrate the approach.
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