Contrast fixed-term contract churn with open-ended, non-contract purchase behavior. See how model assumptions change what retention and value mean.
In contract CLV settings, churn is typically observed at ______.
SKU-level discounts
fixed renewal points
every click event
random minutes
A classic non-contract purchasing model for order arrivals is ______.
naive Bayes classifier
BG/NBD-style models
simple coin toss
linear regression only
In non-contract CLV, we often estimate dropout using a latent state because ______.
inventory is infinite
prices never change
churn is unobserved without explicit cancellations
billing cycles are identical
Which cash flow discounting approach is appropriate for both contract and non-contract CLV?
never discount future profits
discount only revenue but not costs
use negative discount rates by default
apply a periodic discount rate to forecasted net cash flows
Contract CLV models commonly use survival analysis because ______.
prices are fixed forever
A/B tests are impossible
basket size is always one
time until churn follows a duration process
A practical difference is that non-contract CLV must model both purchase frequency and ______.
ad viewability rate
server CPU usage
monetary value per order
page scroll depth
For contract CLV, an observed downgrade to a lower plan most directly affects ______.
inventory carrying cost at suppliers
cookie length
session duration only
expected cash flows per renewal period
Non-contract models often treat customers as active or inactive because ______.
it guarantees normal errors
it removes the need for data
it simplifies dropout representation between purchases
it doubles the conversion rate
In contract settings, a grace period after renewal failure helps CLV by ______.
blocking upgrades
recovering involuntary churn from payment issues
inflating COGS
deleting history
When moving from contract to non-contract CLV, a common pitfall is ______.
using a time axis
copying renewal-based churn logic into transaction data
discounting cash flows
tracking cohorts
Starter
Great start—review how contract renewals differ from open-ended dropouts.
Solid
You read models well; refine discounting and dropout assumptions.
Expert!
Masterful grasp of contract and non-contract CLV tradeoffs.
