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Great article but even this article contains some minor nitpicky inaccuracies in modeling churn. The Lomax distribution (sometimes described as the gamma-expon
by Jorge1o1 6y ago
Great article but even this article contains some minor nitpicky inaccuracies in modeling churn.
The Lomax distribution (sometimes described as the gamma-exponential) would only be appropriate if we're modeling a continuous time process.
For a contractual product with discrete time intervals (aka monthly contract), it would be more accurate to use a geometric rather than exponential model such as the Beta-Geometric.
- numlocked 6y agoBingo! The classic work on this is from Fader and Hardie: https://faculty.wharton.upenn.edu/wp-content/uploads/2012/04/Fader_hardie_jim_07.pdf https://faculty.wharton.upenn.edu/wp-content/uploads/2012/04... A friend and I made an implementation in Python a while back: https://github.com/chrisclark/retentionizer https://github.com/chrisclark/retentionizer
- jwithington 6y agoSuper glad to find this! Have you also seen the lifetimes library? https://github.com/CamDavidsonPilon/lifetimes https://github.com/CamDavidsonPilon/lifetimes