Application of the Beta Distribution Model to the Customer Churn Rate

• Zaidan, Henrique Pinto dos Santos ^[1]
  1. [1] Desktop
• Localización: Socioeconomic Analytics, ISSN-e 2965-4661, Vol. 1, Nº. 0, 2023 (Ejemplar dedicado a: Inaugural Issue), págs. 78-91
• Idioma: inglés
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• Resumen

  • The beta distribution model has been applied in many different research environments due to the flexibility of its two parameters. In this research, we fit this probabilistic model for mod- eling a recurring problem confronted for many businesses called the customer churn rate (or churn rate). It represents the proportion of customers who cancel their subscriptions after a given time. We use data from a Brazilian media service company to develop the modeling. The parameters are estimated by the maximum likelihood estimation (MLE) technique. Finally, we perform the MLE technique by considering two programming languages; Ox and R.