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Henry Stewart Survival Analysis
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Henry Stewart Survival Analysis

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  • Transcript

    • 1. Applications of Survival Analysis to Customer Management Henry Stewart Briefing for Users of Marketing Analytics 4 December 2008, Mayfair Conference Centre, Marble Arch, London William De Genst
    • 2. Survival Analysis
    • 3. Survival Analysis Understanding Customer Attrition
    • 4. Survival Analysis Techniques
    • 5. Survival Analysis Distributions of lifetimes
    • 6. Survival Analysis Distributions of lifetimes
    • 7. Survival Analysis Joining Time Time Survey end Actual Time Time from common origin Distributions of lifetimes
    • 8. Survival Analysis Estimation
    • 9. Survival Analysis Estimation
    • 10. Survival Analysis Trial contract Non-trial contract Log-rank test (Mantel-Haenszel) Chisq= 30.2 on 1 degrees of freedom, p= 3.98e-08 Estimation
    • 11. Survival Analysis Cox proportional hazards model
    • 12. Survival Analysis Cox proportional hazards model Var  SE(  ) z p v 1 0.09 0.03 3.19 0.01 v 2 -0.35 0.19 -1.83 0.06 v n -0.34 0.38 -0.90 0.37
    • 13. Survival Analysis Schoenfeld residuals ~ time Martingale residuals ~ covariate Cox proportional hazards model
    • 14. Survival Analysis Cox proportional hazards model Smoothed term
    • 15. Lifetime Value Analysis Customer Lifetime Value
    • 16. Lifetime Value Analysis time Survival probability Customer spend time
      • Marketing campaign
      • Initial cost
      • Initial return
      • Loyal customers spend
      • more over time
      • Return on investment
      Customer Lifetime Value
    • 17. Case Study Cost of a Direct Mailing Campaign
    • 18. Case Study Free trials Year 1 renewal Cost of a Direct Mailing Campaign
    • 19. Case Study DD cancelation Free trials going on to other products Original Payment Method
    • 20. Case Study Payment method as strata
      • Decreased hazard:
        • More product switches
        • Method payment
        • Downgrading (customer finds fee unjustified for usage)
        • Increased income
      • Increased hazard:
        • Higher household density
      Cost of a Direct Mailing Campaign coef exp(coef) se(coef) z p productswitches -0.21 0.81 0.08 -2.58 0.01 methodswitches -2.76 0.06 0.15 -17.99 0.00 downgrades -1.63 0.20 0.58 -2.80 0.01 income 0.03 1.03 0.01 1.76 0.08 HHdensity 0.06 1.06 0.03 1.95 0.05
    • 21. Case Study
      • - Loyal customers tend to spend more over time
      • - Free trial customers that subsequently subscribe to a paid subscription
        • gradually spend more, to reach same level as paid subscribers
      Paid Free trial Cost of a Direct Mailing Campaign
    • 22. Case Study break-even in week 65 Cost of a Direct Mailing Campaign
    • 23. Case Study Cost of a Direct Mailing Campaign
    • 24. Conclusions

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