Rab Saker and Bryan Smith hit on a topic close to my heart:
These patterns seem to indicate that KKBox could actually differentiate between customers based on their lifetime potential using information known at the time of acquisition. This information might help inform or steer specific discounts or promotions to customers as they register for a trial. This information might also inform KKBox of which offerings or capabilities to discontinue as some, e.g. Initial Payment Method 35 or the 7-day payment plan as shown in Figure 3, align with exceptionally high churn rates in the first 30-days with little long-term survivorship.
Of course, there are relationships between these factors so that we should be careful in viewing them in isolation. By deriving a baseline risk (hazard) of customer churn (Figure 4), we can calculate the influence of different factors on the baseline in such a manner that each factor may be considered an independent hazard multiplier. When combined (through simple multiplication) against the baseline, we can plot the a specific customer’s chances of abandoning a subscription by a given point in time (Table 1).
Click through for the story as well as a set of notebooks.