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Fader and Hardie 2007 Table 1: shifted-beta-geometric fit to the Regular segment
| Tool | Cohort Retention and CLV |
| Source | Fader, P. S., and Hardie, B. G. S. (2007). "How to Project Customer Retention." Journal of Interactive Marketing, Vol. 21, No. 1, pp. 76–90. Table 1. |
| Level | Graduate |
Problem
The Regular customers of the same firm retain 63.1 % after one year, then 46.8, 38.2, 32.6, 28.9, 26.2 and 24.1 % through year 7 (22.3, 20.7, 19.4, 18.3, 17.3 % through year 12). Fit the shifted-beta-geometric model to years 1–7 and project to year 12; compare with a constant-retention (geometric) model.
Inputs to Enter
- Curve box (loaded by default): 1, 63.1 / 2, 46.8 / 3, 38.2 / 4, 32.6 / 5, 28.9 / 6, 26.2 / 7, 24.1 / 8, 22.3 / 9, 20.7 / 10, 19.4 / 11, 18.3 / 12, 17.3; fit through 7
Answers
- α = 0.704, β = 1.182; E(θ) = 0.37; projected S(12) = 17.00 % against the actual 17.3 % (about 2 %)
- Geometric model θ = 0.2260, S(12) = 4.62 %, far below the data
Notes
The default Curve box holds this column and the fit runs together with the default cohort table; press Submit.