Revamping Retention Metrics for a Health Sharing Company

The Problem

Our client, a health sharing company, was struggling to accurately gauge member retention. They had been using a metric called Persistency, which calculated as the division of current members over all-time member counts. However, this metric was proving to be misleading and less informative for the company's specific needs.

The Solution

We proposed to shift from persistency to attrition metrics. The idea was to measure the percentage of customers who stayed for 90, 180, and 365 days. This approach, we believed, could provide a more realistic view of customer retention.

To demonstrate the value of this new approach, we mocked up a Jupyter Notebook with some dummy data. The aim was to show that persistency as a metric could decrease over time, thus creating potentially misleading interpretations. In contrast, attrition allows for a more accurate assessment of customer retention at various time periods.

The Result

The new attrition metrics were significantly more insightful for our client. They were not only able to better measure their business but also received a clear demonstration of our capabilities not just as technical experts, but as valuable business partners. The client was extremely pleased with the outcome, reinforcing our belief that the right metrics can make all the difference in business measurement and strategy.