Attrition Analysis and Customer-Relationship Life Expectancy
The estimation of life expectancy is a fundamental element associated with the valuation of customer relationship intangible assets. In many instances, a simple method is desired to estimate the life characteristics of a customer population. Attrition analysis provides a simple method to establish survivor behavior for a customer population and life expectancy from consideration of the customer population attrition rate.
Contributor Notes
Richard K. Ellsworth is with Deloitte Financial Advisory Services. He is an Accredited Senior Appraiser (ASA) in Business Valuation as well as a licensed Professional Engineer (PE) and a Chartered Financial Analyst (CFA). The views expressed in this article are those of the author and do not necessarily represent the views of Deloitte Financial Advisory Services LLP.