Customer Attrition Analysis For Financial Services Using Proportional Hazard Models
Dirk Van den Poel () and
B. Larivière ()
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B. Larivière: -
Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration
This 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 ‘new’ 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 ‘interactive and continuous’ 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.
Keywords: Banking; marketing; retention modelling; proportional hazard model; Cox regression (search for similar items in EconPapers)
Pages: 45 pages
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Journal Article: Customer attrition analysis for financial services using proportional hazard models (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:03/164
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