Customer - Churn Analysis

About

Churn is typically defined as

<MATH> \text{churn} = \frac{ \text{the number of churned customers} }{ \text{total customers}} </MATH>

Churn can be deceiving especially if your growth is accelerating (it will look lower than it actually is).

A customer churn:

  • from a online store: When a customer stops buying from a business
  • for a service company: rupture of contract

When a customer churns, you are impacting your growth negatively.

Churn is typically rare but quite costly

In a churn model:

  • The highest customers are the reliable customers.
  • The lowest customers are unlikely to come back.
  • The customers around 50% probability are at risk of churning,

Usage

Documentation / Reference


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