Model · 15
Customer value models
Calculations of realised and expected customer value over a defined period.
When this is useful
Customer lifetime value depends on what is counted as value, over which period, and how future activity is estimated. The same customer records can support quite different calculations.
My contribution
I define the value calculation, analyse its components and assess the assumptions used for expected future value.
Cohort contribution matrix with one cohort linked to its monthly contribution curve.
What it covers
- Revenue, cash flows and relevant costs
- Customer and cohort definitions
- Time horizons and treatment of incomplete histories
- Assumptions about future activity
- Uncertainty and sensitivity to missing inputs
The output
A customer value model with its components, horizon, assumptions and sensitivity analysis.
For an enquiry, describe the question and the systems involved.
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