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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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online news readers engagement index (inverse of churn model?)

I would like to get a second opinion of the problem of assigning engagement scores to online news readers. Currently, I build a churn model as required by the company, that mainly predicts the ...
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Calculating Lifetime Value with a “confidence” factor

I am working on calculating the lifetime value of a group of individuals who registered to a site. I am determining the lifetime value of signup and not necessarily a customer. I am calculating ...
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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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How much data is considered “sparse” for fitting a mixed (Beta Geometric) distribution with 4 shape parameters?

I'm using CamDavidsonPhillips Customer Lifetime Value library to calculate CLV, and it uses a distribution based on Peter Fader's work on the subject that fits a Gamma distribution to model customer ...
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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 ...