Questions tagged [customer-lifetime-value]

Customer Lifetime Value (LTV) is the projected, discounted revenue that a customer will generate during their lifetime. LTV is a key business metric for many types of businesses.

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Customer Lifetime Value Prediction

I'd like to discuss some article I just saw about Customer Lifetime Value (CLTV) Prediction, where it shows the training and testing of two ways of estimate it. I'd like to focus on the second one (...
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Accuracy in Estimating Customer Lifetime Value using Markov Chain Model

I've an online customer data which has the purchases made in every month and recency of the purchases information for 12 months. So data looks like below: ...
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Pareto/NBD Seasonality Factor Zitzlsperger Implementation

I am trying to account for seasonality in my Pareto/NBD model based on the following paper. What I can't wrap my head around is equation 2b). My understanding of the seasonality is that it should be ...
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Brainstorming ways to calculate customer lifetime value for a long term subscription model

Business Model: Customers sign up for 12 month contracts with the option to incorporate add on services (these are also contractual). If they cancel, they still pay for 12 months and their account ...
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In the context of predicting customer churn, what is “small effect size?” [closed]

One research paper says an example of "effect size" is the difference in the average age of churners vs. non-churners (31 vs 40). A different paper says "effect size" is the difference in the area ...
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LTV formula calls for Avg Order Value * Purchase Frequency * Lifespan--what to do when Lifespan is less than 1 year and Purchase frequency is 1?

Let's say hypothetically that you have the following: Looking at 5 years worth of data, we have in one group: ...
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Pareto/NBD and New/Existing Customers

I am looking at implementing a Pareto/NBD model to forecast customer lifetime value in a non-contractual business setting. One thing I haven't got my head around yet is whether such a model is equally ...
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Estimating variance of MLE estimate of Beta-Geometric/NBD without MCMC

I'm using Fader's BG/NBD model for customer LTV calculations. The log likelihood is the following: $$ \sum_{i=1}^{N} \ln L(r, \alpha, a, b|X_i=x_i, t_{x_i}, T_i) = \frac{B(a, b + x)}{B(a, b)}\frac{\...
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How to fit newer cohorts using Pareto/NBD or Beta/Geo for CLTV

I am trying to fit the popular Pareto/NBD or Beta/Geometric models for non-contractual, continuous customer data. On top of that I then fit the Gamma/Gamma model for monetary value (using the very ...