Table 1From “Retention should be ranked by profit, not churn alone”
Why is statistical churn probability an insufficient basis for customer retention spend?
Table 1Why is statistical churn probability an insufficient basis for customer retention spend?
| Object | Question | What it does not answer |
|---|---|---|
| Churn risk | How likely is the customer to leave under the stated prediction frame? | Whether an offer changes the risk |
| Response | How likely is the customer to react to an offer? | Whether the reaction creates profit |
| Incremental effect | What changes because the intervention is made rather than withheld? | Whether the change covers its cost |
| Intervention cost | What does it cost to make and deliver the offer? | Whether the customer would have stayed without it |
| Postcampaign cash flow | What financial flow remains after the intervention under the declared horizon? | Whether the customer is valuable in every future period |
| Profit lift | What incremental value remains after cost? | Whether the estimate transfers to another setting |
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Source: Table from this essay. Sources and interpretation are given in the article.
From the essay
Growth that compounds
Retention should be ranked by profit, not churn alone
High churn risk is not customer value: rank retention by incremental effect, intervention cost, postcampaign cash flow, and campaign size.
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