6Data-Mining Approaches toLifetime Value


     In Chapters 35 we discussed probabilistic models for CLV. Each chapter began with a set of assumptions. For example, customers join and generate some fixed cash flow until they cancel and never return; the chance that a customer cancels is constant over time and customers; the event that a customer is retained in one period is independent of the event in other time periods. Based on such assumptions, we could derive an expected CLV. The point is that these models begin ...

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