Customer Lifetime Value


A Customer Lifetime Value offers a discounted value of the future revenues that are contributed by the customer.
Essentially, it is the amount of money that they will spend on your products and services after the expenses of acquiring them as a customer. There are numerous types of CLV. The two most popular forms of CLV calculations are historic and predictive.
All the forecasts are made on the past data leading up to the most recent transactions. Predictive CLV uses previous transactions, mixed with a variety of behavioral indicators that forecast a lifetime value for an individual customer. With each new purchase and new behavioral data, the Predictive CLV will change and become more accurate over time.

Benefits for the company

With predictive analytics, banks can classify potential customers and assign them with significant future value in order to invest company resources on them.
With the growth in the competition, banks require a comprehensive view of the customers to channel their resources in an optimized manner.



Type of expertise/ AI domain

Classification and Regression Trees, Generalized linear Models

Internal data required

Customer Purchase and History

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