LTV Forecasting #
The LTV Predictor estimates the future lifetime value of each customer based on their historical revenue patterns.
What LTV Forecasting Tells You #
Historical LTV is backward-looking (what a customer has spent). Predicted LTV is forward-looking (what a customer is expected to spend over their remaining lifetime with your business).
Predicted LTV helps you:
– Prioritize high-value customer relationships for retention effort
– Calculate return on investment for customer acquisition campaigns
– Identify customers who are underperforming relative to their predicted value
Prediction Methods #
The LTV Predictor supports three regression models, configurable in Analytics > Settings > Predictive:
| Method | Description | Best For |
|---|---|---|
| Linear | Straight-line projection based on average spend rate | Businesses with predictable, consistent revenue per customer |
| Exponential | Projects increasing spend over time | Businesses where customers tend to expand their usage |
| Polynomial | Fits a curve to historical spend data | Businesses with non-linear spend patterns |
Confidence Intervals #
Each predicted LTV includes a lower and upper bound alongside the point estimate. A narrow range means high confidence. A wide range means more uncertainty (usually because the customer has limited purchase history).
Viewing LTV Predictions #
LTV predictions appear:
– In the Customer Analytics page LTV section (average across all customers)
– In the Predictive Analytics page per-customer table
– Via the REST API at /wp-json/dmsilm/v1/analytics/customers