Blog
BG/BB CTLV Modeling for Charities
Do you run a professional conference that occurs periodically? Are you an owner of a cruise line or a blood drive? Perhaps you own a church. If any of these apply to you then you’re running a business that operates in a noncontractual, discrete-time context. Noncontractual discrete-time contexts are business settings where customer transactions occur …
Gamma Gamma Bills Y’all!
If you’ve been following my series of posts on customer lifetime value prediction, you should be well aware of Pareto/NBD and BG/NBD. Both models can be used to estimate the lifetime of any given customer and predict the number of transactions the customer will make while alive. It would be nice if we could also …
Introducing BG/NBD Models
In my last post we examined the nuts and bolts of the Pareto/NBD model. If you haven’t had a chance to read it, you can find a link to the article here. The Beta Geometric Negative Binomial Distribution, or BG/NBD for short, is another probability model that is frequently used by practitioners predict customer lifetime …
Buy Till You Die Modeling with Pareto/NBD
This post is all about Pareto/Negative Binomial Distribution models or commonly referred to as Pareto/NBD. In my previous post I described four business cases where customer lifetime value can be calculated using probability models. Pareto/NBD can be used to model transactions in a non-contractual, continuous business settings. These are cases where customers can not only …
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Probability Models for LTV Calculation
If you’re looking for quick and dirty methods for calculating the lifetime value of your customer base, the first and second post in my series are just what you’re looking for. In this post we will dive into probability models and how they can provide a more sophisticated method for estimating LTV than the simple …
Calculating Lifetime Value with Cohorts
Customer lifetime value is a metric that can be used to gauge the health of a business. In my last blog post on the topic, I showed python code that estimates customer lifetime value by computing a simple average. Today I will show you another approach that is an improvement over the one described previously. …
A Primer on Customer Lifetime Value
A challenge faced by many companies is properly budgeting for marketing campaigns. Recently I’ve been digging into quite a bit of literature on customer lifetime value in preparation for a project I will be taking on with a client. In this post I will provide an quick overview of methods for modeling customer lifetime value for business. …
Simple yet effective RFM
Looking for a quick and dirty way to segment your customer data that does not require machine learning? In this post we will take a look at a python implementation of a popular technique used by marketers to divide customers into buckets of high, medium, and low value customers. The technique is called RFM. What …
Improving the Video Game Recommender
In my last post, we took the 380+ game video game attributes that we extracted from the Steam video game dataset and wrote an algorithm to cluster the attributes into 24 groups. In this post we will use the clusters to make an new and improved video game recommender. If you haven’t read my firstand …