History of Buy Til You Die (BTYD) Models

Let’s take a look back at the history of BTYD models, the staple in Bayesian CLV prediction. Lifetime value comes to life using probabilistic models to handle churn and transaction timing, rather than the relatively straightforward RFM models.

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Supervised Machine Learning vs Bayesian Statistical Models

Most traditional BTYD models are Bayesian statistical. In this lesson, we’ll explore an alternative way of modeling short-term CLV using Long-Short Term Memory (LSTM) Recurrent Neural Networks (RNNs), which are a type of supervised machine learning that can handle time series well.

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Cross-Functional CLV Use Cases

After calculating customer lifetime value at the individual level, what can you do with that information? This lesson provides an overview of cross-functional applications of CLV, from marketing and sales to product and customer service.

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Lookalike Strategies Powered by CLV

Ad platforms allow advertisers to target new users with lookalike audiences. However, the out-of-the-box solution falls short because all of your customers aren’t alike. With customer lifetime value, you can create more effective lookalike audiences for acquisition.

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Optimize Your Marketing Budget

Between acquisition and retention campaigns to content marketing and brand development, it’s difficult to know where to spend your limited marketing dollars. Individual customer lifetime value metrics take the guesswork out of budgeting so you can optimize your spend in real time.

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CLV Migration Over Time

Customer lifetime value is not a static metric. It changes over time—sometimes dramatically—as you observe new data about a customer. By tracking how CLV changes over time, you can determine what product features, retention campaigns, customer service practices, and more impact lifetime value.

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Lifecycle Marketing Strategies

Don’t over-optimize your retention strategy; rather, acquire the right customers in the first place. Design a marketing strategy for customers throughout their lifecycle, from acquisition to retention.

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CLV-Driven Product Insights

You can use customer lifetime value metrics to enrich and inform your product marketing strategy. What if you knew which products high-value customers bought first? Or which products you should offer as a bundle or upsell?

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