Beyond Attrition Analysis for Estimating Customer Relationship Remaining Life
Attrition analysis is recognized by valuation professionals as a simple method to estimate customer population life characteristics. With attrition analysis, customer retirement rates are assumed to be constant across the age vintages of the population. However, many customer populations exhibit irregular retirement rates across population age vintages such that relaxation of the constant attrition rate assumption alters the population remaining life characteristics.Abstract
Contributor Notes
Richard K. Ellsworth is with Deloitte Financial Advisory Services LLP. 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.