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Lifetime Value (LTV) Model
- How and where to invest in Customer Development?
What problems does the business want to solve?
A leading office retail company wants a single metric for deciding how much to invest in developing a customer and which channel has the most potential.
The goal of the FocusKPI team is to identify key levers that influence Customer Lifetime Value (CLV).
Lifetime Value (LTV) is a metric that captures the profits a customer would generate over a future time window. LTV is forwarding-looking based on predictive models. In contrast, current profit captures observed profit to date. Customer Lifetime Value (CLV) can capture enough revenue and cost, offering insights for making the right decision. Many world-class marketing organizations leverage LTV in their marketing programs.
There are Baseline LTV modeling and Incremental LTV modeling, and you can choose the one best fits your business goal.
According to 15 models (3 audiences and 5 survival models) built by the FocusKPI team, we can predict the channel with the highest retention rate after 3 years and segment costumers by profit value. The key drivers of the LTV models in this use case may help you identify key drivers of your business model.
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What problems does the business want to solve?
A leading office retail company wants a single metric for deciding how much to invest in developing a customer and which channel has the most potential. The goal of the FocusKPI team is to identify key levers that influence Customer Lifetime Value (CLV).
Lifetime Value (LTV) is a metric that captures the profits a customer would generate over a future time window. LTV is forwarding-looking based on predictive models. In contrast, current profit captures observed profit to date. Customer Lifetime Value (CLV) can capture enough revenue and cost, offering insights for making the right decision. Many world-class marketing organizations leverage LTV in their marketing programs.
There are Baseline LTV modeling and Incremental LTV modeling, and you can choose the one best fits your business goal.
According to 15 models (3 audiences and 5 survival models) built by the FocusKPI team, we can predict the channel with the highest retention rate after 3 years and segment costumers by profit value. The key drivers of the LTV models in this use case may help you identify key drivers of your business model.