A Simplified and Numerically Stable Approach to the BG/NBD Churn Prediction model
Fuente:
arXiv
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| Autori principali: | , |
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| _version_ | 1866913696346800128 |
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| author | Zammit, Dylan Zerafa, Christopher |
| author_facet | Zammit, Dylan Zerafa, Christopher |
| contents | This study extends the BG/NBD churn probability model, addressing its limitations in industries where customer behaviour is often influenced by seasonal events and possibly high purchase counts. We propose a modified definition of churn, considering a customer to have churned if they make no purchases within M days. Our contribution is twofold: First, we simplify the general equation for the specific case of zero purchases within M days. Second, we derive an alternative expression using numerical techniques to mitigate numerical overflow or underflow issues. This approach provides a more practical and robust method for predicting customer churn in industries with irregular purchase patterns. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2502_12912 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | A Simplified and Numerically Stable Approach to the BG/NBD Churn Prediction model Zammit, Dylan Zerafa, Christopher Other Statistics Machine Learning Statistics Theory This study extends the BG/NBD churn probability model, addressing its limitations in industries where customer behaviour is often influenced by seasonal events and possibly high purchase counts. We propose a modified definition of churn, considering a customer to have churned if they make no purchases within M days. Our contribution is twofold: First, we simplify the general equation for the specific case of zero purchases within M days. Second, we derive an alternative expression using numerical techniques to mitigate numerical overflow or underflow issues. This approach provides a more practical and robust method for predicting customer churn in industries with irregular purchase patterns. |
| title | A Simplified and Numerically Stable Approach to the BG/NBD Churn Prediction model |
| topic | Other Statistics Machine Learning Statistics Theory |
| url | https://arxiv.org/abs/2502.12912 |