Understanding customer lifetime value (CLV) is arguably the most important metric for any business. Indeed, for any business to be successful, the cost of acquiring new customers (CAC) must be less than the CLV. Understanding and predicting CLV for all your users is crucial for understanding the health of your business, and knowing how to grow it.

The great news is that your users already are providing a wealth of information to you on an ongoing basis. Every online behavior and interaction provides clues to that user’s long term intentions with your brand. But it’s not always obvious what behavior is actually meaningful. For instance, how much did your last marketing campaign impact each user’s CLV? How much does their cadence of visits to your site or mobile app impact CLV? Does whether a user logs in or not impact CLV? What about a user subscribing to an alert or newsletter? There are literally thousands of signals which can be collected – and they can all impact CLV.

Using Machine Learning To Predict Customer Lifetime Value

Today’s machine learning technology allows businesses to automatically harness big data and user information to create comprehensive profiles of every user and identify the key metrics that predict customer loyalty and behavior.

The result is powerful models that calculate the value of your entire user base at any instant in time. Every visitor can now have a CLV score associated with them from their very first visit to your online experience.

This plot shows the probability of users upgrading from a free to a premium service. The x-axis buckets users by their probability of upgrading to the new service, and the y-axis shows the number of customers in each bucket.

Combine Predictive A.I. Technology With Automated Personalization

The real power of predictive A.I. technology for CLV comes from combining it with automation, recommendation, and personalization technology. Intelligent algorithms to determine the value of each user is a great first step. But automation, especially combined with 1:1 personalization technology, takes things to the next level by being able to increase the CLV of every user. The combination of predictive CLV and personalized automation has the opportunity to dramatically increase the lifetime value for every one of your visitors.

How would your business benefit from A.I. to both predict and increase the CLV for your users? Learn more about Vidora’s Behavioral A.I. engine.

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