Modeling and optimization of Customer Lifetime Value for a retailer sports retailer
Context
Following the discontinuation of its loyalty program, the customer is alerted to the significant drop in purchase frequency and sales of its existing customers. So, he steers the optimization of customer value over a short-term horizon.
In this context, it wishes to develop an explicit Customer Lifetime Value approach in order to understand the levers for creating customer value over the long term.
Objective
Developing a Customer Lifetime Value approach
- With an understanding of long-term customer value creation
- With the aim of identifying concrete levers for action
- With the aim of getting the departments concerned on board, in particular through clear and actionable CLV analyses.
VERTONE contribution
- Carrying out scoping analyses on value creation over time and its dispersion: vision by cohorts, de-motivation by value deciles
- Identification of the variables with the most significant impact on the future evolution of customer value, and definition of an explicit 5-year value calculation model.
- Mapping the value of the current customer base (20M customers)
- Carrying out sensitivity analyses of customer value to various parameters
- Formulation of recommendations for optimizing customer value around 4 levers and macro-calculation of the respective pockets of value
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