Lifetime Value (LTV) analysis is used for assessing the current value of future customer profits.

LTV analysis serves to estimate the magnitude of expected profit (discounted on the day the analysis is performed) a customer will generate during the whole period of using the company's services.

In order to calculate the LTV index for a customer it is necessary to predict his future behavior, what actions will he take, and how long will he continue to be the company's customer. LTV is calculated on the basis of the size of the profit generated by the customer and the estimated time of using the services. We offer LTV models which, besides being based not only on financial indices, also take into account behavioral information (e.g. how frequently a customer actually uses the services).

Value at Risk (VaR) analysis asses the value at risk of a customer over a short time period. It is predominantly used for selecting target groups for retention campaigns.

StatConsulting has broad experience in performing LTV and VaR analyses. We also offer analytical tools for assessing customer value.

Our LTV and VaR solutions provide the means to:

• estimate the potential value a customer has for the company,
• determine the factors affecting customer value,
• segment the customer population with respect to the magnitude of future profits,
• choose target groups for marketing campaigns.

See also:

• Marketing Support and Analytical CRM