Survivor Curve Selection and Customer Relationship Value

BVResearch Pro
American Society of Appraisers Business Valuation Review™
Winter 2007 Volume 26, Issue 4 pp. 102-105
Richard K. Ellsworth, PE, ASA

Summary

The valuation profession employs a variety of statistical techniques, from simple attrition analysis to more complex retirement rate analysis, to assess customer population life characteristics. For many customer populations, the account survival characteristics are assumed to be constant across the various age cohorts of the population such that customer relationship value is indifferent to account age. However, relaxation of the constant attrition rate characteristic can have a direct influence on the magnitude of the value ascribed to the customer relationship value.
Survivor Curve Selection and Customer Relationship Value
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