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Attrition & Lifetime Value Modelling
Understanding and predicting customer attrition was a key need for the client, to ensure resources allocated for retention strategies were well focussed
Additionally, understanding the lifetime value of a typical customer by modelling attrition behaviour in combination with channel-specific costs of acquisition was of high importance for the client
The insights were required to be delivered in a short time frame, with the key findings distilled for senior management and investors
Survival analysis by cohort was first conducted to understand the baseline performance of the product
Univariate and multivariate analysis was subsequently completed to identify the key drivers of customer attrition, and segment the population for targeted retention strategies
The mix and stability of the predictive variables over time was assessed, as it is imperative to understand any underlying shifts in performance
Deploying Vestigo’s Machine Learning expertise, a model to predict customer attrition was constructed
The net returns at a channel and score segment level were modelled, highlighting value-eroding segments
Continuing to analyse the lifetime value of customer segments in this way will be revolutionary for the client, enabling the product to be refined, and business profitability enhanced
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