The Geometric Law of Annual Halving

Edward C. Malthouse*, Kalyan Raman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


We propose and test an empirical generalization: the probability that a customer will be active in a future window is reduced by half for every additional year the customer is inactive. We test this model over 6 nonprofit organizations and 30 B2C retail companies, and find that it fits very well. No significant differences in the decay constant were found between nonprofits and retailers, different customer groups defined by the frequency of previous purchases, or the length of the future period. The effect of frequency on the probability of future activity is empirically shown to follow the exponential learning curve. Norms are provided for asymptote, intercept and steepness coefficient.

Original languageEnglish (US)
Pages (from-to)28-35
Number of pages8
JournalJournal of Interactive Marketing
Issue number1
StatePublished - Feb 2013


  • CRM
  • Empirical generalizations
  • RFM

ASJC Scopus subject areas

  • Business and International Management
  • Marketing


Dive into the research topics of 'The Geometric Law of Annual Halving'. Together they form a unique fingerprint.

Cite this