System and method for estimating customer lifetime value with limited historical data and resources

A system comprising:

• at least one processor;
• and
• a memory coupled to the at least one processor and having instructions stored thereon which, when executed by the at least one processor, cause the at least one processor to perform operations comprising:
• tracking, for each segment of a plurality of customer segments, at least one segment-level aggregate profit driver among customers over a first historic time period, wherein the plurality of customer segments partition a plurality of company customers;
• tracking customer migrations between the plurality of customer segments over the first historic time period;
• estimating, for each segment among the plurality of customer segments, and based on the customer migrations between segments over the first historic time period and the at least one segment-level aggregate profit driver among customers over the first historic time period, at least one segment-level aggregate profit driver over a second future time period;
• estimating, for a given customer, and based on the at least one segment-level aggregate profit driver over the second future time period, a remaining value of products of the given customer;
• estimating, for the given customer, and based on the remaining value of products of the given customer, a lifetime profit value for the given customer;
• and
• sending a communication to the given customer based on the lifetime profit value for the given customer.

A non-transitory computer readable medium comprising instructions, which, when executed by at least one processor, cause the at least one processor to perform operations comprising:

• tracking, for each segment of a plurality of customer segments, at least one segment-level aggregate profit driver among customers over a first historic time period, wherein the plurality of customer segments partition a plurality of company customers;
• tracking customer migrations between the plurality of customer segments over the first historic time period;
• estimating, for each segment among the plurality of customer segments, and based on the customer migrations between segments over the first historic time period and the at least one segment-level aggregate profit driver among customers over the first historic time period, at least one segment-level aggregate profit driver over a second future time period;
• estimating, for a given customer, and based on the at least one segment-level aggregate profit driver over the second future time period, a remaining value of products of the given customer;
• estimating, for the given customer, and based on the remaining value of products of the given customer, a lifetime profit value for the given customer;
• and
• sending a communication to the given customer based on the lifetime profit value for the given customer.

A method for estimating lifetime value of a customer, the method comprising:

• defining a plurality of customer segment, wherein the plurality of customer segments partition a plurality of customers;
• determining an aggregate remaining value for each customer segment, wherein the aggregate remaining value comprises, for each of a plurality of products, a sum of differences between income and cost for a given product discounted according to a discount rate and weighted according to an attrition rate;
• determining a particular customer segment corresponding to a particular customer;
• estimating, using an aggregate remaining value corresponding to the particular customer segment, and based on historical data reflecting customer migration between segments, a particular remaining value for the particular customer;
• determining a customer offer corresponding to the particular remaining value;
• and
• providing the customer offer to the particular customer.