Retention modeling in Excel

[@wierckx]

Shouldn't the % customers in one segment change over time as retention rates differ from one segment to the other? It seems to me, they are related.

[@madhavb93]

You talk about a class here! Where can I attend that class?

[@danielmc99999]

We need an online version of it... unfortunately, there isn't one yet, but it is hopefully coming soon!

[@rodrigofernandesmoreira]

Daniel, is there any problem to assign each segment size to 50% and let Excel do its magic just on the retention rates?

[@danielmc99999]

you could! the fit will just be worse...

[@paolorizzo7677]

Hi Daniel. Your work is very informative. Could you please share the excel sheet you have used for this video, please?

[@danielmc99999]

Thanks for watching! Here it is: www.dropbox.com/s/968vobogrso8ffk/retention%20example.xlsx?dl=0

[@gandalf183646]

How did you get monthly retention rate = 90%?

[@danielmc99999]

You could set that to any value - it was just an initialization to get the spreadsheet set up, after which we perform estimation to get our best estimate of what it should be.

[@tasfia5904]

Hi, can you please explain what does "customers alive" actually mean? Are those the no of customers throughout the given period or remaining "alive" customers ? I'm confused.

[@danielmc99999]

Those are the customers that still have relationships with the firm (i.e., the number with active subscriptions / haven't cancelled yet).

[@madhavb93]

Did you subtract new customers acquired from customers alive for each month?

[@danielmc99999]

This is just one cohort! You would want to apply this methodology to each cohort separately.

[@user-qm1xg3bz1j]

Which homework is that? Or course?

[@danielmc99999]

I teach a course called "customer lifetime value" that goes through this retention modeling and more! Here's the syllabus if you're interested: www.dropbox.com/s/rfcaninvljdjyj0/McCarthy-Syllabus-FT%20MBA%20%28562%29%20-%20Fall%202020.pdf?dl=0

[@carolgonzalez950]

It's super hard to read, even on the highest volume

[@danielmc99999]

Volume low, or font size small? Definitely not for iPhone watching...

[@souvikghosh100]

Almost inaudible.