I'm Dumping CLV

I've been tired of how much effort I have to go to to make a useful CLV model.

Then to top it off nobody bloody uses it in their decision-making.

The original idea of CLV (customer lifetime value) is to maximise the amount of marketing spend you should use in your budget.

It's great in theory but people are emotional skinbags and can't really understand it well enough to adopt it because it's a lot of heavy maths at it's core.

I have a lot of respect for Wharton Business School and Peter Fader where Fader really adopted CLV, but if the people can't use it, it's too complex.

I've thrown it out to utilise LGP (lifetime gross profit).

This is way faster for me, easier to get a decision made and speeds up the business feedback loop dramatically.

Instead of having to calculate a load of time series information, we just look at who is profitable and do more of the same to those segments.

So far it is resonating well with all types of decision-makers looking for ascension during a looming recession.

Share this page on Twitter · Back to the blog


Did You Enjoy This?

Then consider joining the other data curious getting the newsletter. It's a provocative look into data and decision-making in businesses.