How to Create and Use an Attrition Model

Many Variables

While it’s easy to graph and understand a segmentation strategy based on two variables, the reality often is more complex. Advanced statistical techniques are most useful when a multi-dimensional relationship best describes customer behavior.

Example: Segmenting based on recency, frequency, average order size, product category, or customer’s age or gender is impossible to graph in black and white on a flat sheet of paper. This doesn’t mean that segments must be so numerous and segmentation rules so complex it’s impossible to implement a marketing strategy using multi-dimensional data based on statistical segments. On the contrary, a good statistical analysis should simplify relationships that are otherwise too complex to logically determine.