Calculating Customer Lifetime Value and Churn using Beta Geometric Negative Binomial and Gamma-Gamma Distribution in a NFT based setting
This work addresses customer valuation for businesses in the NFT domain, but it is incremental as it applies existing statistical models to a new dataset.
The paper tackles the problem of calculating Customer Lifetime Value (CLV) and churn for NFT transactions by applying Beta Geometric Negative Binomial Distribution (BGNBD) and Gamma-Gamma Distribution models to historical blockchain data, enabling businesses to estimate customer value and inform marketing strategies.
Customer Lifetime Value (CLV) is an important metric that measures the total value a customer will bring to a business over their lifetime. The Beta Geometric Negative Binomial Distribution (BGNBD) and Gamma Gamma Distribution are two models that can be used to calculate CLV, taking into account both the frequency and value of customer transactions. This article explains the BGNBD and Gamma Gamma Distribution models, and how they can be used to calculate CLV for NFT (Non-Fungible Token) transaction data in a blockchain setting. By estimating the parameters of these models using historical transaction data, businesses can gain insights into the lifetime value of their customers and make data-driven decisions about marketing and customer retention strategies.