Through segmentation, we acknowledge that some customers will have very tails-prone retention coins, which means they will leave us very early in our relationship. Others are much more heads-prone, which we could possible attribute to loyalty or just inertia. But here’s the key: when those tails-prone customers start to drop off in the first few periods, we are left with a much more homogeneous group that largely consists of fairly heads-prone customers. This is why the survival curve drops quickly, then levels off.
