Skip to content
J·BJon BishopIndependent growth marketer

Product adoption · Joint statistical model of customer usage and churn

A Joint Model of Usage and Churn in Contractual Settings

Marketing Science · 2013

Eva Ascarza, Bruce G. S. Hardie

Summary

The joint framework is designed to capture the relationship between engagement behavior and retention, enabling more coherent customer-lifetime analysis than treating usage and churn as unrelated outcomes.

For your marketing

Possible founder application

When usage predicts retention, model the outcomes together and distinguish prediction from causal effect. Validate the framework on your product's billing cadence and usage pattern.

Reported result

What the study found

The joint framework is designed to capture the relationship between engagement behavior and retention, enabling more coherent customer-lifetime analysis than treating usage and churn as unrelated outcomes.

Research question

What the authors investigated

How can firms jointly model customer usage and churn when they observe contractual relationships?

Design

The authors develop an integrated statistical model of usage and retention in contractual settings and illustrate it with customer data from an annual membership service.

Sample and setting

Customers of an annual membership service; the paper models repeated usage and contract renewal/churn jointly.

Scope and transfer

Limitations to keep in view

The application is a particular annual membership service and model assumptions matter. The framework does not mean that observed usage changes cause retention changes in every SaaS product.

Research sources

INFORMS record and author-hosted article; the publisher title and citation and paper setting were checked.

Prefer to write? Send Jon a message.