Calculating Life Time Value for Subscription Products

km_curve.R

library(survival)
library(data.table)
library(ggplot2)

data <- fread('https://raw.githubusercontent.com/IBM/invoke-wml-using-cognos-custom-control/master/data/Telco-Customer-Churn.csv')

churn_data <- data[, .(churn_flag = ifelse(Churn == 'Yes', 1, 0), tenure)]
km_curve <- survfit(Surv(tenure, churn_flag) ~ 1, data=churn_data)

# Calculate Survival and Churn Rate
km_curve_df = summary(km_curve)

# Plot Survival Curve
autoplot(km_curve) + 
  xlab('cycle') + 
  ylab('survival_rate') + 
  theme_minimal()

# Plot Attrition Curve
curve <- data.table(cycle = km_curve_df$time,
                    survival_rate = km_curve_df$surv,
                    churn_rate = km_curve_df$n.event / km_curve_df$n.risk)
ggplot(curve) + 
  geom_line(aes(cycle, churn_rate)) + 
  scale_y_continuous(labels = scales::percent) + 
  xlab('cycle') + 
  ylab('churn_rate') + 
  theme_minimal()