Skip to content
J·BJon BishopIndependent growth marketer

Acquisition · Hidden Markov model applied to two empirical settings

Some Customers Would Rather Leave Without Saying Goodbye

Marketing Science · 2018

Eva Ascarza, Oded Netzer, Bruce G. S. Hardie

Summary

Overt churners were often more active before leaving, while many silent churners disengaged early and rarely canceled formally.

For your marketing

Possible founder application

Separate cancellation from quiet nonuse when measuring churn. Build retention reporting that includes product inactivity and communication response rather than treating account status as the only signal.

Reported result

What the study found

Overt churners were often more active before leaving, while many silent churners disengaged early and rarely canceled formally. The two churn groups responded differently to communications, so one retention strategy may not suit both.

Research question

What the authors investigated

How should firms distinguish customers who formally cancel from those who silently disengage?

Design

The authors develop a hidden Markov model for overt and silent churn and apply it to a daily-deal website and a performing-arts organization.

Sample and setting

Two hybrid customer-relationship settings where customers can formally terminate or simply stop interacting with the firm.

Scope and transfer

Limitations to keep in view

The two applications are specific to their services and datasets. The model's churn-state assumptions and communication responses should be validated for a SaaS product's billing and activity data.

Research sources

Marketing Science abstract and author-hosted paper; both applications and the distinction between overt and silent churn are reported in the paper.

Prefer to write? Send Jon a message.