Recency for Customer Retention on Subscription-Based Services

Persistence is a technique used to predict future customer behavior based on past customer behavior. It aims to capture and analyze how recently each customer actively interacted with the company. If speed is measured with properly selected indicators, it can be a very strong predictor of future customer behavior. The easy payment processing for subscription-based companies can ease your work.

It has been shown repeatedly that up-to-date is the strongest predictor of future customer behavior among the three factors for RFM analysis: up-to-date, frequency, cash. Therefore, if carried out successfully, speed analysis can bring significant business value.

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The general techniques of the final analysis need to be adapted to the different contexts of each company: the unique customer life cycle, product type. In this article, we consider the important case of a subscription (or ongoing) service. 

The service involves continuous use by the customer, often on a contractual basis. Common examples are bank accounts, credit cards, landlines, and cellular services. This service is offered in a highly competitive market characterized by high customer turnover (wear and tear), which affects the profitability of those who suffer.

The choice of a suitable speed meter is not uncommon for continuity services. A bank account or telephone subscription is potentially used every day, so “last use” usually cannot be the basis for measuring speed. The fact that the service is used does not reflect the customer's active decision to interact with the company. 

Therefore, we should try to identify events that reflect the "customer's active decision to interact with the company". In addition, these events should be broken down into events that reflect the customer's positive attitude towards the company and the tendency to strengthen the relationship with the company (e.g. business), and the tendency to leave.

 

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