CLTV is the monetary value that a customer brings to a company over the course of its relationship with that company.
- It allows to identify customers who are likely to bring more profit to the business.
- It is a helpful signal for product customization.
- Contributes to budget planning for customer acquisition and/or retention
Customer Value = Average Order Value * Purchase Frequency
We perform all operations based on the Customer Value.
Average Order Value = Total Price / Total Transaction
Purchase Frequency = Total Transaction / Total Number of Customers
Churn Rate = 1 - Repeat Rate
RepeatRate = Number of Customers Who Have Shopped More Than Once/ Total Number of Customers
When grouping is done by sorting according to the CLTV value to be obtained as a result of these processes and dividing from certain points, our customers are divided into segments.