Are you Back for Good or Still Shopping Around? Investigating Customers' Repeat Churn Behavior

Service firms develop win-back strategies to rectify issues that cause customer churn and rebuild relationships with lost customers. To better support retention, it is important to understand how the revived relationship evolves and possibly ends again. To examine customers' repeat churn behavior, we develop a “mixture cure-competing risks” model, jointly estimating the duration of second lifetimes, multiple reasons for churn, and heterogeneity of customers in exhibiting a related churn reason. The proposed model is tested using a data set from a large telecommunications provider including information on customer behavior and marketing activities during customers' first and second lifetimes. We find support for the existence of a “cured” group of returning customers, defined as those who are not susceptible to churn for the same reason they churned previously. Our findings suggest that mitigating repeat churn behavior can extend customers' second lifetime tenure and increase profitability by $150,000 over the lifetime of the customers in the sample (leading to gains of over $15 million for deferring second-lifetime churn in a million returning customers), depending on the type of churn.