Customer population modelling with residence time structure

Abstract

In many service industries, companies offer a variety of customer packages, with differing levels of service and associated charges. For example, in the case of cable companies, customers may choose to subscribe to different bundles of channels and may also buy phone and internet services. From time to time, customers will upgrade to a more expensive package, or possibly downgrade or discontinue their contract altogether. Numbercraft asked the Study Group to consider models for how the number of customers on each type of contract will change over time. Such models could be used to forecast companies' future income and also to ensure that marketing campaigns have maximum impact.