Customer Lifetime Value Prediction: A Study on Multiple Brands Purchase of Consumer Packaged Goods

Abstract

Customer is a valuable asset for any business. For the development of any business, business must be interested to understand the intangible value lying within the customer which can be capitalized for the long-term revenue generation. The measurement of customer lifetime value in different periods helps to understand the main factors in the business growth. The objective of the study is to find methodology that can be used to predict customer lifetime value for individual customer of business. The study provides right way to think about customer lifetime value. In this study we deployed customer lifetime value prediction system on CPG (Consumer packaged goods) companies those manufacture one category of personal care product for their customers. We proposed a way to observe underlying behavioural characteristics of customers in different time period that can generate different values of variables. Finally, we concluded with a CLTV (Customer Lifetime Value) model, capable of predicting CLTV (Customer Lifetime Value) for customers who made multiple brands purchase of CPG (Consumer packaged goods).