Economics, Econometrics and Finance
6 years ago

New approach predicts customer lifetime value for better business profits.

1 view
Swiss Finance Institute Research Paper Series
Do Public Real Estate Returns Really Lead Private Returns
Alena Audzeyeva, Barbara Summers, Klaus Reiner Schenk‐Hoppé

Paper Summary

The study developed a new way to estimate Customer Lifetime Value (CLV) in a financial setting with diverse customer behaviors. By grouping customers into "neighborhoods" based on similarities, the model predicts future revenue for each customer using past behavior patterns. Tested in a UK retail bank, the model outperformed other methods in forecasting revenue.

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