Survival analysis to understand customer retention

Survival analysis is a branch of models used in medical studies to measure time to outcomes or patient duration and other disciplines have similar techniques (e.g. duration analysis in economics). These techniques are easily translated to customer analytics: BarryAnalytics provides an introduction to the application of survival analysis in retention modeling. Most churn analyses focus on a point in time whereas survival analysis allows you to measure churn over time.

Yesterday’s post from Tom Tunguz on segmenting customers pipelines is the more common approach, focused on moving customers down or through your funnel. Survival analysis is one flavor of cohort analysis but it should be central to your “bottom of funnel,” post-conversion measurement.