There are many formulas available to calculate lifetime value. However, calculating predictive customer lifetime value at the individual level requires a complex model. The steps include:
- Locate the necessary data
- Forecast every existing customer’s behavior
- Split the data into two sets for training and testing
- Add customer features and attributes to the model
- Train and validate the model
- Put the model into production
Read our whitepaper to learn 8 steps to calculate CLV.
Check out this blog post to learn how to make three types of CLV models: analytic aggregate CLV, analytic cohort-based CLV, predictive CLV using statistical models.