A customer can keep a SIM active while moving most spending to another provider. Retention analysis therefore needs to look at engagement and share of wallet as well as disconnections.
This chapter connects network effects, switching costs and information gaps with customer lifetime value. Calculate value from expected contribution, use consistent time periods for retention and discount rates, and compare acquisition spending with the value and payback of each segment.
Put it to work
Calculate contribution-based lifetime value for three segments. Test different retention and discount-rate assumptions. Compare acquisition cost with expected payback, and look for active customers whose top-ups or usage are declining.
A question to try
Which active customers are already moving their spending elsewhere?
