What is Survival Analysis? Survival analysis is a set of statistical methods for time-dependent outcomes. It is typically used when a research question centers around whether or when an event occurs, such as when does a customer attrite? Life Table and Empirical Hazard The life table looks at a lifetime implication of customers whose risk of attriting is depended on tenure and the hazard provides a graphical representation. Flexible Hazard Modeling Methodology The hazard model based on logistic regression was built using discrete time survival data and the model possess a simple parametric form. How the Model was Used The model was scored which provides predictive scores of a customer attriting. The mean residual life was calculated which provides an estimate of the mean remaining lifetime of a customer. Future Considerations Competing Risk such as mutually exclusive reasons for attriting, time-independent variables such as attrition risk, and incorporating seasonality into the model should be considered for the future. Vist http://www.saraconsultingllc.com to learn more about the presenter.

1. Author: Melinda Richmond Date: May 6, 2009 Attrition Model and Mean Remaining Lifetime Disclaimer: Dummy Data

4. Window of Opportunity for Survival Analysis Data Jan 2006 Dec 2006 STUDY PERIOD PRIOR AFTER Account Opened Attrited Right-Censored Attrited

5. Life Table All customers have had a tenure (t) = 0 years, 3.1 million. 500 (0.0161%) new customers attrited and 160,000 new customers did not attrite by end of study period, i.e., right-censored. 2.9 million customers have had a tenure (t) = 1 years. 650 (0.0221%) first year customers attrited and 161,000 first year customers did not attrite by end of study period, i.e., right-censored.

6. Empirical Hazard The increasing part of the curve indicates that customers are more likely to leave COMPANY ABC , and the decreasing part of the curve indicates that customers are less likely to leave COMPANY ABC .

8. Logistic Regression Model

10. Fitted Model for Number of Attritors

11. Fitted Model for Restricted Mean Residual Lifetime