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Including individual Customer Lifetime Value and competing risks in treebased lapse management strategies Mathias Valla, Xavier Milhaud, Anani Ayodl OlympioTo cite this version: Mathias Valla, Xavier Milhaud, Anani Ayodl Olympio. Including individual Customer Lifetime Value and competing risks in treebased lapse management strategies. European Actuarial Journal, 2023, 10.1007/s13385023003580. hal03903047v4HAL Id: hal03903047 https://hal.science/hal03903047v4 Submitted
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01
Identify the start date of the customer's engagement with your business.
02
Track all purchases made by the customer over time.
03
Calculate the average purchase value for the customer.
04
Determine the frequency of purchases made by the customer.
05
Estimate the total duration of the customer's relationship with your business.
06
Multiply the average purchase value by the purchase frequency to find the annual revenue from the customer.
07
Multiply the annual revenue by the total duration to calculate the individual customer lifetime value.

Who needs including individual customer lifetime?

01
Businesses aiming to improve customer retention strategies.
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Marketing teams looking to allocate budget effectively.
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Financial analysts wanting to evaluate company worth based on customer relationships.
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Customer service teams focused on enhancing customer experience and satisfaction.
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Including individual customer lifetime refers to the total value a customer contributes to a business over the entire duration of their relationship, encompassing all purchases and interactions.
Businesses that track customer interactions and sales data to assess customer value and optimize marketing strategies are typically required to file this information.
To fill out the information, gather data on all transactions made by the customer, calculate the cumulative revenue generated, and include details on customer engagement over time.
The purpose is to understand the long-term value of customers, inform marketing strategies, enhance customer retention efforts, and improve overall business profitability.
Information typically reported includes customer identification, total revenue generated, frequency of purchases, duration of customer relationship, and engagement metrics.
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