Maximize Customer Lifetime Value (LTV)
Tom Papantos
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Posted Apr 9, 2024
Increase Customer Lifetime Value (LTV) by understanding what makes them spend more in your brand.
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Mott & Bow
In this project we take LTV as a proxy of overall financial business performance. Having done the customer segmentation, I needed to let the marketing team know how to maximize the probability of converting a customer into high LTV (eg.: giving a discount, free shipping, etc).This projects output was a list of actionables to maximize the probability of customers being high LTV.
Steps for its calculation:
Calculate each customers LTV
Took the 75% percentile as “high LTV”.
3. Having our customer database segmented into “high LTV” and “low LTV”, I ran a logistic regression to know which variables had a positive impact on high LTV, and how much the probability of being one shifted when using that specific variable (eg.: free shipping).