Economics

Myth:Churn is a late-lifecycle problem.

Evidence:Most avoidable churn is set in the first sessions: users who reach a core activation action early retain at multiples of those who do not.

Myth:Loyal customers cost less to serve, pay more, and evangelize for free.

Evidence:Studying four companies over 16 months, Reinartz & Kumar found only a modest correlation between customer longevity and profitability: long-tenure customers expected discounts, were no cheaper to serve, and were not reliably the best word-of-mouth sources.

Myth:Early cohort LTV projections are reliable planning inputs.

Evidence:LTV curves flatten unpredictably; projections built on the first weeks of a cohort routinely overstate long-run value.

Myth:Word of mouth is a soft bonus next to paid media.

Evidence:Vector-autoregression modelling of a social network's growth shows WOM referrals have substantially longer carryover effects and substantially higher response elasticities than traditional marketing actions - and a referral's value can be monetized from the downstream ad revenue a new member generates.

Myth:A points programme will increase loyalty.

Evidence:Most loyalty programmes reward behaviour that would have happened anyway; measured incremental effects are small and skew to already-heavy buyers.