KRISPY ANALYTICS

Chris is a business analyst who likes to practice data modeling in her free time.

She particularly enjoys building analytical models to achieve marketing objectives. For example: clustering models for auto segmentation, propensity models for customer lifetime value predictions, and attribution models for channel evaluations.

This is a blog for Chris to practice her analytical skills and connect with like-minded people.

All in Customer Lifetime Value

Nov 29

Nov 29 Calculating Customer Lifetime Value with Excel

Kristopia

Customer Lifetime Value

There is no one correct way to build a customer life time value model, or actually any models. Today I’ll build the model base off the method created by Gupta and Lehman to calculate the customer value multiplier. Their method utilizes discount and retention rates to forecast a customer’s long-term value denoted by multiplier. A multiplier of three means that the customer’s long term value is three times the profit he generates during the first period.