LTV Prediction Model In Installment Scenarios
1. Background In many businesses with recurring payments—e.g. installment plans, subscription services, financing, insurance renewals etc.—one key task is to estimate the lifetime value (LTV) of a customer. In your setting, because the cash flows accrue monthly (or at some periodic cadence), you may want to estimate the predicted LTV at the end of each month, and potentially project out over a long horizon (e.g. 5 years). We call this pLTV (predicted lifetime value)....