# Exponential decay with offset - is my approach to modeling retention sound?

I have been working on a retention analysis of for a subscription business. A stakeholder asked me if I could do some analysis to model what improved retention could look like under various 't-shirt sized' scenarios e.g. 'moderately improved' , 'substantially improved', 'no change'.

After analysis of monthly cohorts using ggplot and non linear regression, I believe I have a model that fits our data well. Here's a chart showing cohorts oscillating around the modeled retention rate for each billing cycle (x-axis).
:

The function I used here was:

``````exponential_decay <- function(i, a, lambda, billing_cycle) i + a * exp(-lambda * billing_cycle)
``````

Suppose using `nls()` I got the following model params:

i=0.25
a=0.65
lambda=0.55
standard_error of lambda=0.02

My original goal:

model what improved retention could look like under various 't-shirt sized' scenarios

I focused on the parameter lambda and shifted it by standard errors. The closer lambda is to 0, the greater the survival rate. So I looked at the same modeled curve by t-shirt size:

• moderately improved = lambda - ( 1 * 0.02) = 0.53
• substantially improved = lambda - (2 * 0.02) = 0.51

More than 2 standard errors would be outside of 95% confidence.

I have not modeled retention in this way before. Is what I'm doing 'right'? Is this a sound approach to modeling improved retention?

Aside, can I call my function 'exponential decay'? From searching online and reviewing text books, the 'regular' exponential decay model would not include a constant `i` nor a coefficient `a`. But including these params helped my data fit better. What would I call this functional form?

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