Measure Retention Campaigns Against the Right Baseline

The teach: Retention needs a baseline. If 75% of customers renew without a message and 78% renew with a message, the campaign's incremental effect is about 3 percentage points, not 78 percentage points. The difference matters because retention audiences are warm by definition. They already know the product, have prior purchase history, and may be on a recurring behavior pattern. Use holdouts whenever the risk is acceptable. For reminders, hold out a small random share and compare renewal rate. For discounts, compare offer versus no offer and include margin cost. For winback, compare reactivation profit against customers who were eligible…

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