Customer Equity

Customer Retention

Here you will find the additional explanations, tools, and examples noted in the book that will help you to manage and measure customer retention. Sections include:

	Calculating Retention Equity Because it is uncertain how long existing customers will be retained, the calculation of retention equity is more complex than the calculation of acquisition equity. This section provides an example of the profit impact of a retained customer, and then shows two techniques for calculating retention equity: survival analysis and RFM analysis.
	Retention Equity Calculation Profit Impact of a Retained Customer Retention Equity Calculation Using Survival Analysis Retention Equity Calculation Using RFM Analysis
	Retention Metrics and Accounting Descriptions and examples of two key metrics of retention performance.
	Customer Retention Accounting Measures Measuring Customer Retention
	Data Analysis Tools for Retention There are a number of statistical tools that companies can apply to their customer databases in order to characterize customers and predict future behavior, such as purchase levels and defections. Four of these tools are described in more detail here:
	Decile Analysis Using RFM Analysis to Predict Future Purchases RS Matrix to Predict Defections Logit Models to Predict Customer Behavior
	Index: Customer Retention Tables and Figure This section contains the Customer Retention Tables and Figure referred to in the calculations and examples. They are available in PDF format, so you will need the Adobe Acrobat 4.0 Reader to view these documents.
	Retention Tables: 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 Retention Figure: A Decile Table: 1 RFM Tables: 1 - 2 - 3 - 4 RS Table: 1