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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What is a good modelling approach for Customer Lifetime Value when consumption intensity matters?

I would like to produce a customer livetime value (CLV) analysis where the CLV is tied to the intensity of the use of the product, i.e. it is not a subscription business (where the relevant event ...
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Why do Pareto/NBD models require custom likelihood functions in PyMC3 and Stan?

I'm interested in Bayesian modeling of customer lifetime value (CLV), preferably via PyMC3. I've found that research in this area started mid-to-late 1900's and has remained active since. It would ...
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39 views

Chaining/combining logistic and linear models

I have a analysis that is looking to predict the total customer value based on a customer's first purchase amount. I am noticing that a set of features predict whether the customer will purchase ever ...
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51 views

Best way to forecast retention over a certain timespan

Let's say I have data, ...
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Lifetimes: Customer Lifetime Value

Does anyone have practical experience with the Lifetimes package in Python? Specifically, I'd like to know: I have predicted Customer Lifetime Value using the gamma-gamma function for all customers, ...
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45 views

Fader/Hardie BG/NBD model. Interpretation of $a$ and $b$ of the beta distribution drop out process

On R's CLVTools package documentation, there's a sentence referring to the pareto/NBD model I'm working with the BG/NBD model not the pareto/NBD model. I'd like to understand if I can interpret the ...
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How can I improve the CLV accuracy from lifetimes model?

Not sure whether this should be asked in StackOverflow or here, but I believe this question is most about statistics, so I'll try it here. So I was modelling the Customer Lifetime Value using ...
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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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51 views

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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Calculate CLV / TLV for contractual Business

I am desperately trying to apply a CLV/TLV (Customer Lifetime Value) algorithm to my dataset in R. Unfortunately, the more I read about it, the less confident I get if all makes sense. =) Do you have ...
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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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280 views

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 ...
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RFM & customer lifetime value modeling in R

Can anybody tell me how to do recency, frequency & monetary value (RFM) modeling & customer value modeling in R? Also, can somebody refer me some literature on it?