Customer attrition analysis for financial services using proportional hazard models
AbstractThis paper studies the topic of customer attrition in the context of a European financial services company. More specifically, we investigate predictors of churn incidence as part of customer relationship management (CRM). We contribute to the existing literature: (1) by combining several different types of predictors into one comprehensive retention model including several ânewâ types of time-varying covariates related to actual customer behaviour; (2) by analysing churn behaviour based on a truly random sample of the total population using longitudinal data from a data warehouse. Our findings suggest that: (1) demographic characteristics, environmental changes and stimulating âinteractive and continuousâ relationships with customers are of major concern when considering retention; (2) customer behaviour predictors only have a limited impact on attrition in terms of total products owned as well as the interpurchase time.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Operational Research.
Volume (Year): 157 (2004)
Issue (Month): 1 (August)
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Web page: http://www.elsevier.com/locate/eor
Other versions of this item:
- D. Van Den Poel & B. Larivière, 2003. "Customer Attrition Analysis For Financial Services Using Proportional Hazard Models," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/164, Ghent University, Faculty of Economics and Business Administration.
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