Managing Churn to Maximize Profits

For your marketing

Possible founder application

For lifecycle offers, target on expected incremental profit rather than the highest predicted churn score. Measure treatment effects and include discounts, support and future cash flows in the decision.

Reported result

What the study found

The profit-aligned targeting approach uses expected incremental churn and post-campaign cash flows net of intervention costs. The authors report that their method significantly improves campaign profitability compared with conventional churn-probability or offer-responsiveness targeting.

Research question

What the authors investigated

How should firms select customers for retention interventions to maximize campaign profit?

Design

The authors define a profit-based loss function that ranks customers by the incremental financial impact of a retention intervention and test the approach in two field experiments.

Sample and setting

Two retention-campaign field experiments; the accessible abstract does not summarize the industries or sample sizes.

Scope and transfer

Limitations to keep in view

Performance depends on the intervention, available customer data and model evaluation. The publisher abstract does not provide effect magnitudes; a model trained on historical churn risk alone may not estimate treatment lift.

Research sources

Marketing Science abstract and author-hosted manuscript; two field experiments and the profit-based targeting design are specified in the abstract.