What is CLTV model in SAP CRM-ANA - CRM Analytics?

SAP Term: CLTV model

• Component: CRM-ANA

• Component Name: CRM Analytics

• Description: Used to specify The profit per customer The customer retention rate per customer segment and lifetime period. This data can be entered manually or calculated automatically.

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• Key Concepts: 
  The CLTV (Customer Lifetime Value) model is a predictive analytics tool used in SAP CRM Analytics. It helps to identify and predict customer behavior and loyalty over time. The model uses customer data such as purchase history, demographics, and other factors to calculate the expected value of a customer over their lifetime. 
  
  How to use it: 
  The CLTV model can be used to identify high-value customers and target them with personalized offers or promotions. It can also be used to identify customers who are at risk of leaving and target them with retention strategies. Additionally, the model can be used to identify customer segments that are most likely to respond positively to certain offers or promotions. 
  
  Tips & Tricks: 
  When using the CLTV model, it is important to ensure that the data used is up-to-date and accurate. Additionally, it is important to consider other factors such as customer sentiment when making decisions based on the model’s predictions. 
  
  Related Information: 
  The CLTV model is part of SAP CRM Analytics, which also includes other predictive analytics tools such as the RFM (Recency, Frequency, Monetary) model and the CHAID (Chi-Square Automatic Interaction Detection) algorithm. These tools can be used in combination with the CLTV model to gain a more comprehensive understanding of customer behavior and loyalty.