Evaluation of client status for likelihood of churn

An article comprising at least one computer readable storage medium containing instructions executable by a computer to perform a method of evaluating client status, the method comprising:

• receiving client data representing events from a set of different event types performed by clients in a non-contractual setting with a firm offering products or services to the clients;
• estimating, using a computer and based on the client data, parameters of a statistical model that describes client behavior, the statistical model being based on an assumption that the events for each client form a sequence of event types that follows a Markov chain, wherein a churn type of event is encoded in the statistical model as an absorbing state of a stochastic process, with a time of transition to the absorbing state modeled as being infinite, and wherein the churn type of event is not observable in client data, and performance of the churn type of event places the clients in a permanently inactive condition with the firm, and wherein at least one of the parameters corresponds to the churn type of event;
• calculating a likelihood of churn for a plurality of the clients at one or more time points using the statistical model and its estimated parameters;
• and
• selecting a client for which the likelihood meets a predefined condition to remain active with the firm.

An apparatus for evaluating client status, comprising:

• a storage medium to receive client data representing events from a set of different event types performed by clients in a non-contractual setting with a firm offering products or services to the clients;
• a non-transitory computer-readable storage medium storing program code executable by a processor, the program code defining:
• a parameter estimation routine that estimates parameters of a statistical model describing client behavior based on the client data, wherein a churn type of event is encoded in the statistical model as an absorbing state of a stochastic process, with a time of transition to the absorbing state modeled as being infinite, wherein at least one of the parameters corresponds to the churn type of event, and wherein the churn type of event is not observable in the client data, and performance of the churn type of event places the clients in a permanently inactive condition with the firm;
• a likelihood calculator that calculates a likelihood of churn for a plurality of the clients at one or more time points using the statistical model and its estimated parameters;
• and
• a client selector that selects a client for which the likelihood of churn meets a predefined condition, the client selected to remain active with the firm.