Analyzing Retention and Churn for Customer Lifetime Value

The chapter emphasizes the importance of understanding customer lifetime value in predicting customer behavior, discussing factors like relationship duration, purchase frequency, and transaction profit margin. It challenges the traditional approach of using overall churn rate as a primary metric, highlighting the significance of cohort-specific churn measures like one month or six month churn for evaluating business performance. The discussion distinguishes between retention in subscription and non-subscription businesses, stressing the need to track cohort triangles to understand performance across different acquisition cohorts effectively.