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Measuring Churn and CLV
(Thread)
Contents
1. #Churn
2. #CLV
Resources:
- How @ShopifyData Merchants can Measure Retention shopify.engineering/how-shopify-me…
- “Counting Your Customers” the Easy Way brucehardie.com/papers/018/fad…
- lifetimes lifetimes.readthedocs.io/en/latest/Quic…
(Thread)
Contents
1. #Churn
2. #CLV
Resources:
- How @ShopifyData Merchants can Measure Retention shopify.engineering/how-shopify-me…
- “Counting Your Customers” the Easy Way brucehardie.com/papers/018/fad…
- lifetimes lifetimes.readthedocs.io/en/latest/Quic…
1.1 Churn | Definition
"Far too often businesses define churn as no purchases after N days; typically N is a multiple of 7 or 30 days. Because of this time-limit, it arbitrarily buckets customers into two states"
But different customers buy at different frequencies?
"Far too often businesses define churn as no purchases after N days; typically N is a multiple of 7 or 30 days. Because of this time-limit, it arbitrarily buckets customers into two states"
But different customers buy at different frequencies?
1.2 Churn | Probability
Instead Shopify represents churn as a probability and infers it per customer by making some distributional assumptions and using only: recency, frequency, age
This avoids the problem of choosing N.
Instead Shopify represents churn as a probability and infers it per customer by making some distributional assumptions and using only: recency, frequency, age
This avoids the problem of choosing N.
